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How The Stock Market Crash Led Up To The Great Depression

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The Stock Market Crash was the most notorious event of the twentieth century in the economic world. With a decade before filled with parties and prosperity, the crash was shocking to say the least, or was it? During the year of 1929, there were clues that most ignored, due to the fact that the financial sector of America was on a high from the recent victory out of World War I. On March 25, 1929, the New York Stock Market suffered from a mini crash. Following that event, steel production went down, house construction slowed, and car sales waned. However, most people ignored or didn’t know about these settle clues. As the summer came the market was back at the top and reached its peak on September 3, 1929 (“United States of America:History--The Roaring Twenties: Boom and Crash”). …show more content…

Seconds after the crash, banks were swarmed by tens of thousands of clients, worried that they would leave the building penniless. The aftermath of the crash was so devastating to each citizen of the United States, and eventually to the rest of the world. “The National GDP, at the end of 1929, dropped to 1/3 of its point during the early twenties” (Galbraith). America’s largest and most infamous companies began to tumble down, and eventually went bankrupt. At least half of banks in America were closed down by 1933, and thirteen to fifteen million people became unemployed. America had arguably entered the most depressing time of its life, The Great Depression ("The Stock Market Fell to Its Lowest Point During the

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After the stock market crashed, the country and its people lost everything and became greatly in debt. The United States stock market took a huge downfall when it crashed on October 27, 1929 (Leuchtenburg). People who

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With a loss of around 319 billion dollars in today’s money, the stock market crash of 1929, as a result, made issues for the United States. Before the crash people were feeling so secure and thought they were going after that American Dream. This all came tumbling down when prices started falling and people recognized the mess they were in. Distrust was rampant and even still impacts today. The stock market crash of 1929 caused devastation on the economic, social, and political environment in the United States.

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The federal government throughout the the 1920’s went through many changes which lead to The Great Depression in the 30’s. One of the foremost causes of the tragic turn of events was, the crash of the stock market. Between the start to end of the 1920’s the stock prices rose five times. This then meant that they had over-inflated prices, and people losing money in the industry. The stock market was a fairly new source that held a position in many homes of Americans.

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People started lining up in front of their banks demanding their savings but banks were unable to give out all of the customer’s savings because it wasn’t available in cash within the banks vaults, as banks usually give out money for loans, mortgages, and so on. As a result, banks started to fail and experiences four banking panics in the fall of 1930, the spring of 1931, the fall of 1931, and the fall of 1932. These all resulted in the collapse of the economy as people became jobless; the workers who were the backbones of the American economy started losing their jobs; the new jobless were not the old-line poor who had always struggled at the bottom of the economic ladder. Many of the newly unemployed had always been solid citizens, middle- class workers such as bank tellers, factory men, female telephone operators, garage mechanics, and office clerks(Infobase publishing 35). People who were living in rural areas started deserting their farms looking for employment opportunities in the cities; they started living in shanty towns thatwere later called ‘Hoovervilles’ after president Herbert Hoover whom was blamed for this worsening

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Yet, the stock market crash was just the commencement. Since many banks had also capitalized huge portions of their clients’ savings in the stock market, these banks were compelled to close when the stock market crashed. Seeing a small number of banks closing their doors caused additional panic across the country. Frightened

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It become the path to bankruptcy. That was only just the beginning of the worst depression. There was many banks had also invented many portions of their clients, saving in the stock market. These banks were forced to close when the stock market crashed. Many banks in America were closing all over the country.

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Many people in today’s society believe that the cause of The Great Depression was the stock market crash in 1929, but that is not the case. There were many problems the United States faced during the 1920s from social, political, and economic factors that led to the stock market crashing and the beginning of the Great Depression. Some of the major factors that caused the stock market to crash were “southern California and Florida experiencing frenzied real-estate with major banks failing and mortgages being foreclosed. ”1 This started a downfall in the United States that had many people losing their homes.

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