The Rise Of The Great Depression Essay

The Rise Of The Great Depression Essay

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When referring to the Great Depression, the economic from 1929 and continuing through most of the 1930s is usually what is being referenced. (great depression, n.d.) The causes of this depression were many and varied, five of the top were: the stock market crash of 1929, bank failures, reduction in purchasing, America 's economic policies, and drought conditions.
Throughout the 1920 's the U.S. stock market underwent rapid expansion, caused by a period of wild speculation. That is until 1929 when production had declined and unemployment rose. This caused the value of stocks to exceed their real value. In September 1929 the stock prices began to decline, by October 18 a true fall began. October 29, 1929, is a date that has become known as the beginning of the Great Depression. Black Tuesday, as this date has become known, hit Wall Street as investors were trading close to 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out investors, who had thought their investments to be safe. This affected not only the United States, the industrialized world began to spiral downward after the stock-market crash. Leading to the deepest and longest-lasting economic downturn in the the history of the Western industrialized world.( Staff 2010)
The stock-market crash left most Americans very nervous about their own financial future.The Wealthy began to pull their investment assets out of the economy, and over all spending was less than in the past. As bankruptcies became more common, people had less faith in the banking institutions. Many decided to withdrawal all of their money from the banks a phenomenon known as Bank Runs. This caused banks to need to liquidate all of their asset...

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...e their production with new technology, and crop varieties. As the economy declined farmers were affected with lower prices for crops. This created the need for more crops to pay for equipment bought on time. In the early 1930 's droughts caused the farmers for suffer even more. Many farmers were forced to seek government assistance. Even with government assistance however, many farmers could not maintain their operations. Some voluntarily deeded their farms to creditors. While others faced foreclosure by banks. Some had to leave temporarily to search for work to provide for their families. In fact, at the peak of farm transfers in 1933–34, nearly 1 in 10 farms changed possession, with half of those being involuntary. So while the drought conditions may not have aided in the begging of the Great-depression it did contribute to it lasting longer. (Drought Basics, 2016)

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