ipl-logo

Main Causes Of The Great Depression In America

905 Words4 Pages

What were the main causes of the Great Depression in America? Introduction: With the collapse of the U.S. stock market in October 1929, the U.S. economy quickly entered a recession, and gradually spread to the world. After more than two years of struggle, the world economy comes into a more serious depression. The Great Depression was the longest, deepest and most widespread depression of the 20th century. It originated in the United States. Causes: The Great depression was based on a variety of reasons. And it began in the 1929 the New York stock market’s big slump and spread a vicious circle. That affected the whole America and even the whole word. Primary Causes: Capitalist society had productivity develops rapidly after the two …show more content…

The stock market’s expansion raised the false prosperity in the beginning of 1929. And large amounts of foreign capital into the United States greatly enhanced the financing capacity of the Bank of America; promoted the loans from the Bank of the United States. Because Americans as a shortcut to wealth stock. People not only put their own savings all into, but also the bank loaned to buy stocks. This had the stock price was crazy to arise. That behavior had greatly increased the instability of financial market. American prosperity was based on an unstable condition. National income was inequality. The gap between the rich and the poor was scale-up. Market was decreased. The false prosperity increased and concealed society conditions. The limited the growth of social actual spending power and resulted in a relatively small …show more content…

Drought Conditions make food to decrease. The price of foodstuff has been increasing. People cannot pay their taxes or debts. They have to sell their land. People 's burden is increasing. That is one of the reasons. Conclusion: The Great Depression has many reasons. But they are all based on a vicious circle. The fundamental problem is the industrial development under, agricultural products devaluation and wages too low, lower class does not have the purchasing power, wealth is concentrated in the upper hand, the circulation of money appear obstacle. So the Roosevelt New Deal through a series of social reforms, enhance the income of the lower class, the security purchasing power and restart the business cycle. By the business productivity increasing, society supply enhancement. But demand cannot follow the productivity. It results social unemployment. Labor income is reduced, but the labor time is increasing. The society is in a state of oversupply. Follow the by the corporate failures and more people out of work. Thus society starts repeating the vicious

Show More
Related
633 Words | 3 Pages

The United States boasted the largest economy of the world in the 1920s, but the glory was soon followed by an economic crisis that would devastate the country. The Great Depression was the longest economic downturn the United States had ever experienced and lasted from 1929 to 1939. While there is a lack of consensus on exactly how the Great Depression came to happen, overproduction was a leading factor, along with poor banking practices that eventually led to bank failures, ruining millions of families. The Smoot-Hawley Tariff also greatly contributed to the emergence of this tremendous recession, aggravating world trade, thus weakening economies even more.

Read More
634 Words | 3 Pages

Following the end of the First World War, the United States was initially prosperous. In 1929, that prosperous age about-faced into a downward spiral that enveloped the entire country. What was eventually called the Great Depression was essentially caused by four major events. At the start, the stock market was strong and thriving and the population was willing to invest in it. Americans were so confident in the market, in fact, that it was common for them to take out loans to fund their investments.

Read More
468 Words | 2 Pages

Many lost their jobs. Businesses were shutting down, Farmers were not able to grow their produce. Although there were several factors that came together to cause the Great Depression, the three main causes were buying on credit, stock market crash, and overproduction. Buying on credit helped cause the Great Depression because many Americans would buy goods that they cannot afford off installment buying. Installment buying is when you purchase a item with payments.

Read More
710 Words | 3 Pages

People bought stocks with the speculation of benefit to optimistically help support their families, as well as being able to have all home necessities. The fight for a small profit at the least was strong and intense because of the little amount of money there was to spread between businesses and citizens. Americans began to overextend their budgets and purchased more stocks at higher prices than what they were actually worth. William E. Leuchtenburg stated in The Perils of Prosperity that, “With debt no longer being shameful ..... consumers bought goods on installment at a rate faster than their income was expanding” (Doc 6).

Read More
699 Words | 3 Pages

Some might be wondering, what caused the Great Depression? Well, the Great Depression arrived in 1929. American citizens were out of work and didn’t want the government's “charity”. Stock market crashes, supply and demand, and contractions are some of the causes that can be found throughout the Depression.

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

People trusted the “Buy now, Pay later” idea, so much so that they bought so much, and didn't have enough money to pay later. The distribution in income was only favorable for 40% of the entire population, and the citizens were gambling on their stock investments and thought nothing could go wrong. Imagine it is October 28, 1929, living a lavish lifestyle in your mansion, only to have the all of the dreams that came true crushed the very next

Read More
962 Words | 4 Pages

These factors negatively impacted American society as the stock market lost 90% of value between 1929 and 1932, depositors lost $140 billion, Unemployment increased 25%, shanty towns arised, 60% global trade collapsed and American economy decreased 50%. Roosevelt postulated the government should produce an equal society distributing wealth ultimately resulting in The New Deal. The New deal evidently impacted Americas national history, restoring and lifting Roosevelt’s country out of The Great Depression, kickstarting its economy. The new deal also shaped national history politically and socially as Roosevelt’s government introduced deficit spending and welfare programs. The Building of infrastructure created employment for American society increasing employment rates from 16% in 1929-32 to 36% in 1933.

Read More
755 Words | 4 Pages

Throughout the many years of the United States’ existence, there has been many tragedies due to economic issues. Some of the major issues with the economy occurred throughout the late 19th and early 20th century. Within these years, many labor laws and movements were put into action which changed the economy tremendously. From 1890 to the mid 1940s, our country suffered with a few depressions in which impacted the entire nation’s economy which include the Child Labor Law of 1916, the Great Depression of 1929, the New Deal and the Wagner Act of 1935.

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
765 Words | 4 Pages

The Great DepressionTopic: the great depressionQuestion: How did the great depression affect americans?Thesis statement:The great depression affected americans because it destroyed their economy. Millions of families lost theirs savings as many banks collapsed in the 1930’s. The Great Depression was the worst economic drop of all times in the industrial world1. The Great Depression began because of a stock market crash in 1929 and came to end ten years later in 1939, around 15 million americans were unemployed and about half of the American banks failed. It was one of the darkest era in the United States.

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
780 Words | 4 Pages

There were a variety of causes that caused the Great Depression, but the main cause that started it was a decrease in spending. This led to production decrease because manufacturers and merchandisers did not want to have unused items just sitting on the shelves. In October of 1929 the stock market crashed. The United States stock prices had reached levels that could not be justified by sensible predictions of future earnings. The results of this were catastrophic.

Read More
728 Words | 3 Pages

In 1929, America underwent an economic crisis. It was the longest and most severe depression of the industrialized western world. This was known as the Great Depression. The cause of this tragic event was partially caused by buying stock in credit. Banks handed out loans to people but when the stock market crashed, they couldn’t pay back the loan.

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 Main Causes Of The Great Depression In America

Open Document