What Caused the Great Depression?

During the years of 1914-1918 was “the greatest wars to end all wars” known as World War I that jumpstarted our journey towards the Great Depression. In this war it involved fighting in between nations, alliances, imperialism, militarism, nationalism, and assassinations. After all this fighting came the Roaring 20s. The Roaring 20s was a time period when many people defied prohibition, indulged into new styles and art, and the economy was at an all time high. Now imagine having a luxurious mansion and you leaving your family at home to go to work at your fancy job. Then you come home that evening and you’re all of a sudden broke. Unreal right? Well this was what happened to many families on October 29, 1929 when the stock market crashed and the Great Depression started. United States economy took a turn for the worst and brought about devastation which resulted into problems for the American people/government and them having to deal with it in different ways.

Main Causes of The Great Depression The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe.

The Great Depression Emmanuel Kangah History 101 April 13, 2014 The Great Depression was a period in America’s history that scarred the economic welfare of it citizens, however when it was over the many lessons were learned and the American people became stronger than before. Leaders and politicians kept a positive attitude and expected that once the country bounced back from the lost, that it would be an uphill battle to sustain the economy. President Herbert Hubert stayed optimistic but he could not dodge being blamed for the economic downfall by the American people and as a result was not re-elected. Many believed that The Great Depression was just a recession that could have been remedied, instead leading monetary authorities made poor decisions that caused the recession to worsen.

The Great Depression was the most catastrophic economic disaster in American history. It affected all of the US from sea to beautiful shining sea. Old and young, rich and poor, black and white, everyone suffered the consequences of the over extravagant Roaring Twenties. Businesses closed, everyone was up to their neck in debt, banks failed, and the mid-west was soon a dust bowl from over farming and reclaimed equipment. With the Smoot-Hawley Tariff in place, deflation, everything imaginable bought on credit, and unreliable loans, everything adding up eventually led to the stock market crashing and the Great Depression.

The Great Depression was a time that the stock market crashed and world trade stopped, people didn’t have a place to live, and people didn’t have jobs. The Great Depression started on October 29, 1929, this time period was devastating to both rural and urban lifestyles. As a result of the Great Depression, the unemployment rate in America had dropped from a high of twenty-five percent to fifteen percent. The rich did not take as big of a fall as the poor did. Great Depression caused massive levels of poor, hunger, there were more people and less jobs and political unrest. The government tried to solve the Great Depression with the New Deal.

The age of the Great Depression was littered with varying stories of extreme poverty rivaled by the contrasting stories of the .1 percent of society that possessed extreme wealth. President Hoover called the depression “a passing incident in our national lives” (cite 1) which proved to be a gross underestimation of the severity of the situation. The previous decades that brought roaring success and expanding technology was thought to be a period of great success that was earned through hard work and fluid government; and so when the economy collapsed blame turned inward and failure felt deserved just the same.

Imagine a society where over 25% of the population was unemployed. That is what it reached during The Great Depression (“The Great Depression”). During the depression unemployment rates were the highest they have ever been. It is highly speculated to this day on what exactly caused The Great Depression. Most historians agree it was a chain of events, one after another, that brought our country into chaos. Some events were more impactful than others. These events caused pandemonium among the public, which blew it even more out of proportion by trying to save themselves from bankruptcy. The three major events that caused The Great Depression were the Stock Market Crash of 1929, the bank crisis, and public overreaction.

1) The Coming of the Great Depression’s A. The Great Crash i. In February 1928 until October 1929 there was an economic boom, stock prices began to rise in addition there was easy credit offering. ii. October 29, 1929 “Black Tuesday” was a failure and was thought to have ben thee cause of the Great Depression.

The Great Depression was an economic problem in North America, Europe, and other industrialized countries around the world that began in 1929 and lasted until 1939. It was the longest and most stressing depression ever. The U.S. economy had gone into a depression six months earlier, but the Great Depression had begun with a breakdown of stock-market prices on the New York Stock Exchange in October 1929. The next three years stock prices in the United States had continued to drop, until 1932 it had dropped to about 20% of its value. Other than messing up thousands of individual investors, the decline in the value of good banks and other financial facilities went bad. Many banks were constantly forced to hide their debts, and that’s why by 1933, 11,000 of the United States 25,000 banks had failed. The failure of so many banks was because of the lack of confidence the economy had, which had led to too much reduced of spending and demanding money. This was constantly dropping, and unemployment began rising. By 1932, U.S. manufacturing had dropped to 54% of its money, and unemployment had gone up to between 12 and 15 million workers. The Great Depression began in the United States, but then had turned into a worldwide economic problem.

The 1920’s was a very prosperous period for many Americans. Food production increased 64 percent, worker productivity increased by 40 percent, electricity sales doubled, fuel consumption more than doubled, and pay was increased for many industrial workers (Davidson, 2008). With the soaring economy and new items hitting the shelves all the time, American consumers were living the high life. Even if you wanted something and did not have the money you could simply get it on credit and pay for it later. After all, the economy was showing signs of immense economic prosperity with productivity at an all time high what could go wrong. Construction soared with the building of new skyscrapers, suburbs, and road construction. The automobile became cheap enough for almost any average family to afford. “Traffic jammed the nation’s highways and created a need for gas stations, roadside restaurants, tire manufacturers, and other businesses” (Roaring Twenties, 2011). The New York Stock Exchange’s “rising share prices encouraged many people to…buy shares in hope of making large profits following future price increases” (Mitchener, 2011). However, despite the booming prosperity of technology, consumer spending, economic growth, and a complete change of culture, there were still many that did not share the prosperity of others. “Prices of farm products fell by about 40 percent in 1920 and 1921” (Mitchener, 2011) which caused farmers to have to borrow a lot of money from the banks to keep their farms going. When farmers could not pay their debts they either had to move or rent their homes from the banks. Many of these banks went out of business from 1921 to 1929. Americans had no idea that their booming economy was about to c...