The Wall Street Crash: The Most Significant Cause Of The Great Depression

The Great Depression was a universal economic depression that occurred during the 1930's. The Wall Street Crash, has traditionally been seen by Historians such as Peter Temin and Keynes as the most significant cause of the great depression, 'a watershed in history' as suggested by Peter Temin, an economic Historian. This interpretation has been based on the belief that the Wall Street Crash was the official start of the Great Depression as well as the source to which greatly contributed to the economic prosperity, the stock market, had now become their reason for their downfall taking into account the dire effect it had on the banks. However, this traditional view point overshadows other factors particularly the clear income inequality during the 1920's. More importantly, the large focus on the wall street

Overall, the significance of the Wall Street Crash is a short-term factor that was overplayed and has become a factor so focused on that it took precedence throughout History. The long-term factor being the mismanagement of the Gold Standard by the Federal Bank was most significant.

As History would agree, The Wall Street Crash appears to be the most convincing argument for the most significant factor of the Great depression. This view is further supported by John Maynard Keynes who argued that sharp decline in private investment (which he believed was already unstable due to what he dubbed, 'the animal spirits' of the capitalists) which led to a decline in aggregate demands was the key reason for the Great depression. this view is merited by the clear evidence that illustrates that on September 3rd, the Dow Jones industrial average had fallen to 381.2 and by October 29th, it had fallen from 326.51 to 230.07, a 29.6 percent decline in the shares on the New York Stock exchange and by November 13th it had dropped to 199.