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Cause And Effects Of The Great Depression

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The Great Depression is a terrible economic crisis, a crisis that lasted in America from late 1920s to mid 1930s that left many families suffering without jobs, homes or even food. America produced for, and traded all across the world so this crisis may have started in America but it caused a global effect. Leaving many countries heading towards economic downfall.

The economy started to fall in the 1800s due to The Panic of 1873. During this time the country had many bank crises on its hands, due to this many European investors withdrew from stock shares. A Mass of people pulling out of a stock at once leaves investors not wanting to invest in that company because they will not benefit from it. This causes many companies to go out of business including the railroads. Railroads were very new during this time period so they relied on investors to help run their trains and pay for expenses, without investors the railroads were bankrupt, having no trains meant no transportation of people or products which was heavily relied on. Our country had no way of fast distribution across the country and businesses losing money led the United States into an economic decline. Slowly America started to recover until October 28th 1929 about a decade later the stock market crashed. …show more content…

Stocks were overvalued, whether it was a house loan, borrowed money or technology, people invested it. With all these investors in companies it caused the value to decline rapidly. Not only did your day to day people invest in stocks bigger companies did too, like banks. When the stock market crashed many people ran to the banks to gather the rest of their money, banks enabled a first come first serve rule until they ran out of money and closed down. Commercial banks were able to stay open due to the government's efforts in lowering the discount rate, allowing some banks to stay

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The problem was that many people that bought stock bought their shares on a type of credit in which they paid part of the amount required and planned on paying the rest after they sold their share. When the stock market crashed, shares were worth nothing and the investors could not afford to pay the remaining balance of the original purchase price. Moreover it was common for people to borrow money from banks to buy stock so it became a problem for the banks when the population could not pay back their

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As things go, stocks were being bought so much, the prices were driven up beyond their real value. When investors started selling in order to cash in on profits, others did the same and the value of stocks fell dramatically. Like above, this ended up with their stock market crashing down upon their eyes; people going bankrupt in a single day. When Roosevelt became the U.S. President in 1933, he introduced "New Deal". This created public programs for the unemployed

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The critical problems in the late 1920’s, threatening american economy was the older industries such as textiles, steel, and railroads, which were basic to the fundamental well-being of the economy, were barely profitable. Crop prices dropped, americans thought the nation would continue to prosper under Republican leadership. The bottom fell out of the market and the nation's confidence, and half of the banks failed. The causes of the stock market crashed and the Great Depression made the collapse of the economy occur more quickly and the depression worse than it could have been. Many were out of a job, and others experienced pay cuts and reduced hours.

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The Great Depression was the worst economic downturn in the history of the world. It began in the United States when the stock market crashed in October 1929. Everybody was sent into a panic and millions of investors were wiped out. Unemployment levels began to rise after consumer spending and investment dropped, while stock prices continued to increase. Companies started to lay off their workers, and soon nearly thirteen to fifteen million people in America were without jobs.

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The Great Depression was a roughly 10-year period in the early twentieth century that was shaped by the United States’ national economic crisis, but affected the global economy, as well. It began in 1929, when the stock market first crashed and stock prices began to fall, but only 2% of Americans owned stock and were affected at this time. (1:48) It wasn’t until tens of thousands of people began to withdraw money from banks and hundreds closed across the country, leaving 28 states bank-less (5:32) that the population truly began to suffer. Unemployment rates skyrocket and more and more people begin to go bankrupt, with 34 million Americans left with no source of income by 1932.

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There began to be a gradual decline in prices and the stock market ruptured. On October 24, 1929, the infamous “Black Thursday” took place, where stock holders went on a panic selling spree. Things then went from bad to worse, stock prices went down 33 percent. People stopped purchasing goods and business investments decreased after the crash. In the fall of 1930, the first of four major waves

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