The Stock Market crash caused the Great Depression by making investors and companies losing majority of their money. The stock market crash happened on October 29, 1929 and was caused by the trading and selling of 12.9 million stocks. The Great Depression lasted from 1929 to 1939 and was the worst economic crisis which caused many people to become unemployed, businesses, and banks started to close and fail. Also the depression challenged American people and families by putting them in economic and social issues. Millions of people and families lost their savings and many banks which failed in the duration of the
All of their hard earned money was just suddenly taken away as in if they never had any money in the first place. People that suffered from losing their entire savings from the banks eventually began getting frustrated the government. As the market was crowded with inexperienced but feverishly eager investors who lacked capital reserves, the falling prices produced a shock effect... ... middle of paper ... ...e stock market crash of 1929, Black Tuesday. Black Wednesday was used to refer to a day of widespread air traffic snarls in 1954 as well as the day the British government was forced to withdraw a battered pound from the European Exchange Rate Mechanism in 1992. Black Thursday has variously been used for days of devastating brush fires, bombings and athletic defeats, among other unpleasantness.
Speculators who borrowed money from the banks to buy their stocks could not repay the loans because they could not sell stocks. This caused many banks to fail. Since bank deposits were uninsured before the 1930s depositors' their money, which in many cases was all that many people had. The stock market crash intensified the course of the Great Depression in many ways. Besides wiping out the savings of thousands, it hurt commercial banks that had invested heavily in corporate stocks.
Fearing that banks would close, customers lined up to withdraw their money. Since banks rarely keep enough cash on hand to pay all their customers at once, many banks shut down. The Great Depression was the time of great economic hardship, had begun. As banks failed or cut back on loans to businesses, factories produced fewer goods and there... ... middle of paper ... ... not return until United States entered World War II in 1941. After World War I, the price of food began to drop causing some dramatic effects on the United States economy.
This speculation and the resulting stock market crashes acted as a trigger to the already unstable U.S. economy. Due to the misdistribution of wealth, the economy of the 1920's was one very much dependent upon confidence. The market crashes undermined this confidence. The rich stopped spending on luxury items, and slowed investments. The middle-class and poor stopped buying things with installment credit for fear of loosing their jobs, and not being able to pay the interest.
CLOSING STATEMENT: although, … Businesses were also affected by the Stock Market Crash. Many businesses were already struggling so the crash hurt them even more. “With money scarce, banks and investors were suddenly unwilling or unable to provide industry with the money it needed to gr... ... middle of paper ... ...oblems here in the United States started happening overseas. There was a high tariff put on products that were needed to be exported to other countries which caused more harm to other economies. It is easy to see that the Stock Market Crash was a horrible event for America.
(Scaliger egot Americans defaulted because of the lack of money being circulated. Deflation was a huge factor that drove America into the Great Depression. There were many factors that caused the Great Depression from the banks creating IOU’s to deflation. This economic crash was due to the capitalist system of the United States Federal Reserve on top of the many band-aids that were implemented. Before the 1920’s, the average worker could not borrow money.
With the banks making loans to people to invest in stocks, when the stocks started to crash there was a large amount of panic selling causing a great many numbers of businesses that when bankrupt. All of the closing of businesses made a great many people unsure of the volatility of the market. This made people want to make sure their money was safe by taking it out of the bank. Due to the stock crash people started not being able to pay back the money they got from loans from the banks. With the banks relying on the circulation of money and people not needing all of their money all at once, the banks started to go bankrupt as they did not have enough money to give back everyone the money they have in the bank.
Thus, causing hundreds of people to lose their jobs and if people did not have jobs, they were not able to shop for anything. If people were not able to shop for products, then stores would start closing down due to lack of business and more cut back in jobs. Moreover, when gas was high, it caused a higher rate with transportation and therefore the cutback on truck drivers and manufactures. With businesses going down, prices on items started to rise up to keep up their payments as well. When such chaos went across the nation, the world had experienced the second great depression once the stark market collapse due to the lack of sells.
The Great depression was the worst times in American history. During the great depression, the economy was very bad and many people couldn’t afford food or houses. There were many people who couldn’t finds jobs in this time and life was very hard for millions of American people. The great depression started on black Tuesday, October 29, 1929 and lasted until 1939. Some of the main causes of the great depression were that there was overproduction of food and also industrial parts, banks gave out too many loans and at the end people could not pay them, and also the stock market crash of 1929.