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Essay of history the Great depression Stock market
Factors leading to stock market crash of 1929
How did investment in the stock market lead to the great depression
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Rising share prices would simply bring more people into the markets, convinced that it was easy money. In mid-1929, the economy stumbled due to excess production in many industries, creating oversupply. Essentially, companies were able to acquire money cheaply due to high share prices and invest in their own production with the required optimism. By 1933 the value of stock on the New York Stock Exchange was less than a fifth of what it had been at its peak in 1929. Business houses closed their doors, factories shut down and banks failed.
Document E says, “Businesses needed to sell stock to raise money to expand. By the mid-1920s only 2 percent of Americans were purchasing stock. But as manufacturing continued to expand, stock prices climbed upward and investors made money.” This quote shows how businesses were relying on stocks to make money and once the market crashed, they lost all the money that they had in the market at the time. Since Businesses were relying on the market, a lot of them weren’t able to survive.
The stock market began to crash on October 24, 1929, also known as “Black Thursday.” Stock exchanges were created to address the capital issue. A stock market was where the owner of a business would sell his ownership in shares. Shareholders would put money into a business and when the business received a profit shareholders would get paid.
Speculation and installment buying involved the decisions Americans made that caused the economy to plummet. In 1929 stocks began to be worth more than the value of the company. Most people believed that investing in stocks was the flawless way to become rich and that anyone could do it.
The purchase of a stock with hopes that the value will increase but not actually knowing it will is known as speculation, this combined with the heavy use of installment buying caused many people to fall into extreme debt, creating an unstable economy and leading to the Great Depression. Since it was no longer seen as shameful to be in debt, the American people were now taking advantage of credit and installment buying (Document 6). People wanted to maintain this new standard of living and did so by amassing large amounts of debt through this buy now, pay later system. This acceptable economic prices, combined with the speculative purchase of stocks led to a detrimental economic downfall. The prices of stock were driven up based on this speculation instead of any increase in the profits of the business (Document 5).
For example, In Document five it states that in 1929, a collapse of the American Prosperity happen. Which means people was putting a lot of their money into securities hoping to the make the stocks rise. People began gambling which made a lot of them go into debt (Harry J. Carman and Harold C. Syrett, A History of the American People, 1952). Also a lot of people were speculating, meaning investors was putting money towards stocks hoping to gain, but risking a loss. By 1931, six million Americans could not find work.
The stock Market was the cause of The Great Depression The Great Depression started in 1929 and it ended in 1939. It has been the most long lasting economic downturn in the United States. That event caused so much damage. In the book “ The great depression” by David F. Burg (pg. 365) the author lists all the effects, for example, Investors went bankrupt, banks failed, factories closed, farmers lost their farms etc.
As Franklin D. Roosevelt once said, "We cannot always build the future of our youth, but we can build our youth for the future." In hopes to rebuild America after the Stock Market Crash. The Stock Market Crash affected millions of people. This lead to the Great Depression. The Stock Market Crash is important because of how suddenly it appeared, how it caused people to lose everything they had, and how it affected the economy of the United States for years to come.
Concurrently, stock prices perpetuated to elevate, and by the fall of that year had reached levels that could not be justified by anticipated future earnings. The stock market bubble finally burst, as investors began dumping shares on October 24, 1929, this lead to millions of shares being worthless, and those investors who had bought stocks “on margin” were wiped out completely. This caused people to become much poorer and have to go through a change in lifestyle which was bad especially for the time as social standing was very important if you intended to move up from your class, Which is a main cause of the ‘great
The stock market crash of October 29, 1929 provided a dramatic end to an era of unprecedented, and unprecedentedly lopsided, prosperity. This disaster had been brewing for years. Different historians and economists offer different explanations for the crisis–some blame the increasingly uneven distribution of wealth and purchasing power in the 1920s, while others blame the decade’s agricultural slump or the international instability caused by World War I. In any case, the nation was woefully unprepared for the crash. For the most part, banks were unregulated and uninsured.
The Great Depression of 1929-1939 was the worst economic period in the history of the U.S.. Citizens relying on credit, bank failures, and bad farming practices were just a few of the many that led to the disaster. After the “Roaring 20’s” people started to try new things, AKA the age of rebellion. With that, many people started creating new inventions and sharing more ideas, but with this came many flaws leading to economic disasters. As businesses became successful, they developed a new concept where people would buy on credit.
In March 1936, Photographer Dorothea came across a camp of 2,500 poor campers and snapped a photograph of struggling mother with her children known as “Migrant Mother” the photo came to describe America’s Great Depression era. Dorothea was traveling through California, taking photographs of migrant farm worker for Resettle Administration when she came across Florence Owens Thompson, she saw and reach the hungry and hopeless mother as if drawn by a magnet. The image became a symbol of the Great Depression. The Great Depression was a critical worldwide economic depression that took place mostly during the 1930s, started in the United States after a major fall in stock prices, which lasted for 10 years. It was the longest, deepest, and most extensive depression of the 20th century.
In October of 1929, the Dow Jones Industrial Average fell 25% in four days, this is defined as the Stock Market Crash of 1929. Billions of dollars were lost, countless investors were crushed by the amount of money they lost, and a plethora of people were forced into debt. The Stock Market Crash intensified the Great Depression, which was was a time of economic calamity in America in the 1920’s and 1930’s. The Great Depression was caused by the consolidation of overproduction, false prosperity, unemployment, banking crises, and the stock market crash of 1929.
Effects of The Great Depression The Great Depression started in the 1930’s. It affected many different people in many different ways. It affected the farmers because there was a surplus of food driving prices down, the children because they had little to no food, it made some people famous, and even the president’s because they had to try to find a way to make things better and give the people relief. It was a very difficult time in history.
“We are serious about replacing fossil fuels, we are going to need nuclear power, so the choice is stark: We can keep on merely talking about a carbon-free world, or we can go ahead and create one, ” stated Peter Thiel , a partner in Founders Fund, in a column on nuclear power in the New York Times, urging the world to take immediate action to limit climate change. It was estimated that the amount of carbon dioxide released into the atmosphere by burning fossil fuels reached a record high of 36. 1 billion metric tons in 2013, that was 706 metric tons more than in 2012. (Zolfagharifard, 2015) Carbon dioxide is the main greenhouse gas emission that contributes to the global climate change, which has become a growing concern in the past few
