More handpicked essays just for you.
Black friday's effect of the economy
Key factors of the great depression
Causes of the great depression flashcards
Don’t take our word for it - see why 10 million students trust us with their essay needs.
The Great Depression was a difficult time in American history. Many families and businesses suffered due to the stock market crash. Despite the stock market crash being a contributor to the Great Depression, the Depression did not happen because of it. There were causes that led up to the crash such as the get rich quick mentality, the Smoot Hawley Tariff, and the bank failures that led to the stock market crash and contributed to the Great Depression. Wall Street was seen as a “money trust” and “a place where insiders fleeced small investors” (Give Me Liberty, Eric Foner, pg 786).
The average income of the American family dropped 40 percent from 1929 to 1932. Income fell from $2,300 to $1,500 per year. People lost their jobs, struggled to provide for their families, and subsequently business failed. Just as people were optimistic about the overall state of America it took a turn for the worst. The great depression hit in the fall of 1929.
There were far too many independent banks during the period of the Great Depression, and the problem with the surplus of independent banks was the lack of support they could provide each other. The Run on the Banks resulted in the fall of banks, and an overall lack of confidence in the banking system. The overuse of credit in the economy helped trigger the run on the banks by people taking out loans from banks and then not being able to afford the continual payments, leading them to withdraw their money and shut down the banks. The Stock Market Crash was also a major factor in the start of the Great Depression. People who were buying into the stock market were gambling their money into the stock market in the hopes of making a quick profit (B).
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
On the flip side of that, some people were investing too much and over speculating in the stock market, which was a short-term economic cause of the Great Depression. People speculated, or gambled, in the stock market to make a quick profit. Basically, investors would buy stock they thought would rise and later sell for a profit. The problem was, however, was speculating was only good in theory, and if the stock price didn’t rise, investors could lose a lot of money and find themselves in a lot of debt. Both of these things weakened the US economy, which in return weakened the world economy.
The Great Depression was an era of great distraught for the vast majority of those who endured it. Since then, there have been a great number of theories as to what caused this traumatic time in American history. The Real Bills Doctrine was a theory that argued that if banks only made sensible business loans, the economy and banking system would remain in good standing. This theory also speculated that if loans were made for the wrong reasons, such as for the stock market, problems would arise. This is the often unrealized origin of the common theory that the stock market crash was the primary cause of The Great Depression.
In response to question 1, the major cause that started the Great Depression was foreign policy toward trade. High tariffs were place on foreign imports which in turn caused other countries to do the same for American imports. This in turn reduced the demand for American goods, resulting in over production, dropping prices, and the inability to pay off dept for the equipment needed for the previous high demand of goods. The downward spiral of cause and effect led to workers being laid off to cut cost for lower demand products, farmers foreclosing due to low demand for crops, banks closing due to unemployed customers trying to withdraw savings, inflated and fraudulent stock market practices, and decreasing confidence in the capitalist system.
The Great Depression was the most devastating, long-lasting economic downturn in history. The Great Depression took place shortly after the stock market crashed in October of 1929. The economy shrank 50% in the first five years of the Great Depression. Unemployment skyrocketed throughout these 10 extremely rough years. This caused several banks to fail and a vast increase in homeless people and families.
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.
The Great depression has many causes, but the biggest trigger for the great depression was bad monetary policy from the Federal Reserve. “The Federal Reserve System was created to prevent events such as the great depression from happening, but from 1929 to 1933 its policies did the opposite of what they were created to do (KUPELIAN).” According to Ben Bernanke, the past chairman of the Federal Reserve, the central bank helped create the Depression. The main reason he blames the central bank is that it used tight monetary policies when it should have done the opposite. According to Bernanke, “the Fed began raising the fed funds rate in the spring of 1928.
So, then once those people actually got the stocks that they wanted instead of paying back the banks for the loans they had given them, the people of the United States of America had asked for more loans to put into more stocks or invest more into that one stock that they were supposedly gaining from. Since they would take money from one bank and practically put it into another bank, it was just screwing everything and everybody around, making the economy a crazed hell. Back to the reasons that were happening during the Great Depression, with the event of Black Tuesday, the day that the stock market had totally fell apart and crashed terribly, well that didn’t go so well for everybody with the fact that the market was already crashing down which made the market worse with these sales. “In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars.
There were many causes of the Great Depression, World War 1 was just the heavy hitter as war industries and war bonds were closing out. Because of the war industries closing down, many Americans found themselves without a job, making the unemployment rate skyrocket. With all the soldiers coming home, goods became inflamed and sold at a high cost that few could afford. We also had war debts and reparations to handle. American allies faced a huge challenge in paying off their debt to America.
One cause of the Great Depression was the Stock Market Crash of 1929. The Stock Market Crash in return led to thousands of national banks failing, and billions of dollars lost in deposits (Barnes & Bowles, 2014). Americans become frightful of losing their cash, and they rushed to pull their reserve funds from their neighborhood banks. With minimal expenditure staying inside the banks created a destruction or closing of a significant number of the nation 's bank. The last result viewed as that the banks had fizzled.
The Depression A cause of the Invasion of Manchuria was the Depression that hit Japan during 1929 to 1921. The 1920’s were seen as the glamour age filled with dramatic changes politically and socially. During this decade America’s economy was strong and credit was introduced. Everyone seemed to have money however they had so much spare money that they had nothing to do with it. So instead they decided to invest what they could in the Stock Market in Wall Street.
It was the long lasting economic downturn, as it lasted for almost 10 years, which hit the parts of Wall Street. As a result to this crash, investment and spending decreased immensely. The industrial output also declines, hence, unemployment increases. There were around 13 to 15 million Americans jobless at that time.
