ipl-logo

What Were The Causes Of The Great Depression

893 Words4 Pages

People are led to believe that the Great Depression started with the stock market crash of October 1929, but that isn't true and it leads people to mistake correlation with cause. When one thinks of the Great Depression they think it began after the stock market crash, but not because of it. The underlying economic conditions in the U.S before the stock market crash weren't all "moonshine and rainbows"; The 19 twenties featured large scaled domestic consumption of relatively new consumer products, which was good for American industry. Much of this consumption was fueled by credit and installment buying, which as it turned out was very unsustainable. The thing about credit is that it works fine unless and until economic uncertainty …show more content…

other signs of economic weakness also appear throughout the decade, for instance, in 1925 the growth of car manufacturing slowed along with residential construction and Herbert Hoover labeled "an orgy of mad speculations" in the stock market that began in 1927. According to historian, David Kennedy, by 1929 commercial bankers were in the unusual positioning of loaning more money for stock market and real estate Investments then for commercial ventures. It is easy to see where one would think the stock market crash occurred only because of the depression, possibly because it turns American economic history into morality play, but the truth is that the stock market crash and depression were not the same thing. A lot of rich people lost money in the market, but what made the Great Depression the Great Depression was massive unemployment and accompanying hardships, and this didn't actually begin until around 1930 or …show more content…

But actually deflation is much worse. An example of this would be when prices drop, businesses would often cut cost, resorting in them usually laying off workers. These workers then wasn’t able to purchase anything so inventories continue to build up and prices dropped further. Banks then stop lending money, so this resulted in employers not being able to borrow money to make payroll to pay their workers, which caused more and more businesses to go bankrupt, leaving more and more workers unable to purchase the goods and services that would usually keep the business open. One is also able to blame Andrew Jackson because it was his distrust in central banking that caused this one big mess. Some might think it's too simple, but the federal reserve does deserve a good amount of the blame for not rescuing the banks and not including money into the economy to fight this deflationary

Show More
Related
417 Words | 2 Pages

Buying on credit, overproduction, and income inequality were just some of the leading factors to the great depression. It began when installment buying was introduced people didn’t view debts as shameful and bought things at a faster rate than they could pay. People were also investing a lot in the stock market one day it crashed. October 29, 1929 (now known as black tuesday) was the day the stock market crashed. It caused great panic in America since many peoples entire life savings were lost in one day.

Read More
710 Words | 3 Pages

Throughout the many years of the Great Depression, the American economy plummeted greatly because of ongoing issues throughout the United States. The American market, and essentially continuously buying, are what keeps an economy in any country moving. The points at issue which allowed the economy to go down consist of three major factors. All three of these aspects took a great amount of citizens down along with all of their profits. Families, businesses, and employees struggled to stay standing during this time period.

Read More
426 Words | 2 Pages

Inflation, played a role in the crash, “an unwarranted increase in currency and bank credit” (Patterson). Employment is what led to people not able to make payments back to the banks, which in turn made the banks fail. Some people were even taking out their money of the banks which also forced banks to close.

Read More
564 Words | 3 Pages

The wealth during the 1920s left Americans unprepared for the economic depression they would face in the 1930s. The Great Depression occurred because of overproduction by farmers and factories, consumption of goods decreased, uneven distribution of wealth, and overexpansion of credit. Hoover was president when the depression first began, and he maintained the government’s laissez-faire attitude in the economy. However, after the election of FDR in 1932, his many alphabet soup programs in his first one hundred days in office addressed the nation’s need for change.

Read More
1069 Words | 5 Pages

Herbert Hoover’s Presidency Herbert Hoover, the thirty-first president of the United States was very disappointing according to many people. Hoover had a significant impact on World War 1. For example, during World War 1, he organized a peace army that saved 350 million lives from starvation and disease. This is one of the many reasons why people chose Hoover to become the president. Herbert Hoover had a disappointing presidency because he did not overcome the Great Depression and the Stock Market Crash during his presidency.

Read More
653 Words | 3 Pages

The Great Depression was a severe worldwide economic depression that took place during the 1930s. The article by Edwin Gay and pictures compiled by Cary Nelson are both descriptions of how the Great Depression was and the several impacts that it had on the American economy. The range of the great depression is unprecedentedly wide according to Edwin Gay. The great depression was believed to have started from the collapse of the US stock market in 1929. This was shown in a picture as compiled by Cary Nelson

Read More
1159 Words | 5 Pages

Imagine it's October 28, 1929, living a lavish lifestyle, owning a mansion, sailing on a 100 foot yacht every weekend, and having what seems like unlimited money that can be spent on anything at anytime. Then, all of a sudden, October 29, 1929 comes. The stock market crashes, banks are closing everywhere, and personal possessions are being foreclosed upon. The greatest economic downfall in the history of the United States has just began. This would become known as the Great Depression, which suited the time period between 1929 and 1941 perfectly.

Read More
749 Words | 3 Pages

The Great Depression was a financial and industrial recession that began in 1929. Two long-term causes of the Depression were the overproduction of crops by farmers, which exhausted the land and spurred a huge decrease in crops’ value, and a large number of people buying on margin in the stock market, forcing banks to lose more money than they could afford. President Herbert Hoover, elected in 1928, believed in rugged individualism, which meant there would be no government handouts, voluntary cooperation, where people help themselves and the government only mediates, and that the economy has cycles and therefore the Depression should not be considered dangerous. These beliefs prolonged the Depression because Hoover did not give aid to citizens nor did he attempt to change the economy. When President Franklin

Read More
499 Words | 2 Pages

The piece that were played next was Praeludium in G Major performed by Stephan Distad on the organ. The piece began with short rapid notes. As it progressed, the texture became polyphonic as unwinding and expansion of each melody line overlapped the original, resulting in three interchangeable melodies. The rhythm were energetic. Short, melodic and rhythmic phrases were commonplace, including the basso ostinato, a melody set over a repeated bass pattern.

Read More
135 Words | 1 Pages

Before the Stock Market crash of 1929, America went through a decade of prosperity and social change known as the Roaring Twenties. New fads and numerous inventions emerged throughout our country. Many people bought on credit and as a result, our economy flourished. However, many Americans failed to realize this would be one of the underlying causes leading to the Great Depression. For instance, “Most people bought, but many couldn’t afford to pay the full price all at once.

Read More
880 Words | 4 Pages

During the 20s, which became known at the Roaring 20s, American society was at an all time high and people were prospering as the nation’s wealth almost doubled and American was sent into the modern, consumer age. However following almost directly after the Roaring 20s, America entered a period of economic failure, also known as the Great Depression. During this period, the U.S faced economic, social, and political turmoil. The government and various individuals quickly sought after solutions to address the problems facing America during this time. Herbert Hoover, who was President at the start of the Depression, and his many reforms intended to revitalize the economy and create more jobs but would fail and his belief in rugged individualism

Read More
757 Words | 4 Pages

The Great Depression of 1929 was one of America’s most influential downfalls that crippled society for years. The depression caused many years of failure and poverty for almost all of society. The government’s role during these times was crucial and critical for turning around the economy. The depression had a major effect on government’s power and involvement with the people and states. The government was less involved before the depression.

Read More
585 Words | 3 Pages

America had experienced other depressions or “panics,” but none were like the Great Depression. The Great Depression began on October 29, 1929, Black Tuesday, with the stock market crashing. Most people believe that the cause of the Great Depression was the stock market crashing. Although that is what triggered the Great Depression there were many underlying causes that lead up to the stock market crashing. Some of the underlying causes include under-consumption/over-production, uneven distribution of wealth, loose banking and corporate regulations, tariffs policies, and the stock market.

Read More
726 Words | 3 Pages

The Great Depression was caused by speculation and installment buying, income maldistribution, and overproduction because each of these factors combined made the economy worse before and after the stock market crash, which led to The Great Depression. Speculation and installment buying helped caused The Great Depression because people were buying so much stuff on credit, when

Read More
750 Words | 3 Pages

The first cause of Great Depression was bank failure. It was one of the main causes of the Great Depression. Throughout the 1930s over 9000 banks failed. In 1920s there were a lot of banks.

Read More

More about What Were The Causes Of The Great Depression

Related Topics

Open Document