Black Thursday And The Causes Of The Great Depression

The Great Depression scenarioize the time between the Stock Market Crash 1929 and the following commercial crises all over the world until 1941. The Stock Market Crash, also known as Black Thursday, was caused by different mistakes on the part of the stock market and the citizens. The stock prises rised as a result of the increasing popularity of gambling on the stock market in the 1920s, which in term let to a speculation bubble. The market was flooded by stocks and the demand for them came from both, society and asset classes. In addition to large-scale investors and wealthy companies, however, there were mostly small investors who bought many stocks and borrowed many loans from banks to finance their speculation. This led to the fact, that

As a result, the equity prices decreased and bulk sales on the stock market were the consequences. On October 24th, 1929, called the Black Thursday, a rapid sequence of events occurred, as all investors wanted to sell their shares at the same time to any price, as they were afraid they would not be able to repay their loans and debts. These sales led to an extreme decline in share prices and many companies lost their value. The lost value corresponded to about 11 billion dollars, which in that time amounted to 1.5 percent of the gross social product of the United States in one year. Among other things, banks had to make big losses and even register insolvency. By the collapse of the banking system, many people were unable to borrow furthermore loans and certainly did not pay back. This in combination with an increasing interest in rates led to great poverty in the American population. Even large companies were rarely supported by the banks by loans. So, the companies lacked money, which would be necessary for investments resulting in extremely decreasing turnovers of the

African- American and Europeans were still, by no means, equal and so, many African- American workers were released from industry and farm work to provide work places for Europeans. They were also blamed for the misery of the white people and they had to cope with even more extreme attacks and extreme poverty during this time. Since, at that time the economy of the United States was broadly networked in the international market, many other countries, including Germany, were affected by the economic crisis. Because of the fact, that people of all social strata and descent were affected by the effects of the economic crisis, very vigorous unrest and revolts aroused very quickly. In fact, President Hoover, who was in office until 1933, did not intervene immediately because he underestimated the situation. This led to the impoverishment of more and more people. As this became more and more clear, Hoover tried to use the help of donation organizations to combat poverty. Although, the desired money sums were often collected, they usually couldn’t even improve the situation. The situation only improved a bit when Roosevelt was elected president in