Black Tuesday: The Cause Of The Great Depression

Since the birth of the United States of America, the country has been a growing nation of ingenuity and economic wealth. Revolutionary inventions like the telegram, cotton gin, and the steam engine helped to pave the way to allow the United States of America to develop its position as a fast rising world power. Even though the country was on the fast track of economic prosperity, there was a period where the nation faced a severity of issues spiraling the economic boom to a poverty-stricken era. This gloomy period on America’s economy would takes its place as the Great Depression. Several factors caused this recession to tumbled the economy into the Great Depression, but the crash of the stock market on October 29, 1929 marked the beginning (Murrin et al., 2012). This catastrophic day in history is known as Black Tuesday. The stock market saw billions of dollars lost as stock values dwindled. However, the surrounding factors involved in the cause of this stock market crash devastated the economy but a series of other instances helped to continue the economy to plummet.

These beliefs allowed for the buildup of loans and credit beyond what banks were able to cover financially, and once Black Tuesday sparked the beginning of the Great Depression banks found themselves in financial despair. The inability for banks to pay their customer, which had positive balances force these financial institutions to close their doors. This additional factor in the Great Depression drove the government to develop regulated banking practices. The Emergency Banking Act and the later development of the Federal Deposit Insurance Corporation assisted the availability of federal loans and the protection of depositor’s money (Murrin et al.,