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. 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. “More investors put their money into stocks so they could make a quick profit.”(Doc 5) A Ladies Home Journal would talk about how to become rich, you just have to save and invest in a stock market. This journal said “I am in my firm belief that anyone not only can be rich but ought to be rich.”(Doc 2). This journal was influential for people just to …show more content…
A contraction is when consumer spending and investment dropped, causing steep declines in industrial output and employment as failing companies laid off workers. Contraction started to begin when the roaring 20s were coming to an end. Many people were getting laid off. People were getting laid off because production fell and businesses failed. Some people were living off of $22 a month.(Doc 7). People did not have enough money to buy items they used to buy. People started to make their own clothes and wash their own clothes. This also made demand go down because people started making their own items. One man was working four jobs and was making the same amount of money when he was working one job. (Doc 7). A numerous amount of people were living on the poverty line. $2000 was considered the poverty line and 60% below the poverty line.(Doc 9). There was not enough money flow to keep people
Although the 1920’s were booming and prosperous, the United States soon entered a prolonged economic depression. In October of 1929, prices in the stock market began an uneven downward slide (Document 2). As investors decided that the previous boom in the stock market was over, they sold more stock, thus causing the declination to increase even further. Many citizens of the United States were greatly affected by this. Families who had invested in stock lost most, if not all, or their life savings.
The great depression in the US, which began in 1929, and ended in 1938 was caused by many different things all happening at the same time in the economy. The wall street crash in October 1929 was one of the main causes, when the stock markets crashed. This was caused by many things, but the main reason for it was a deflation (which is an event where the general level of prices in an economy are reduced) On October 24th (black Thursday), share prices dropped by 14 billion dollars in a day, and more than 30 billion in a week. This forced many of the banks to close, due to them investing their client’s savings in the stock market.
The Great Depression occurred after the stock market crash in 1929, but lasted for years after, until 1940. One reason the crash occurred was because banks were failing. Banks were lending out money to anyone even if those people did not have good credit. Another reason was that productivity of products were high, but the demand for those products decreased. Since people were not buying, companies were losing money, which led to lay-offs.
The context of the Great Depression is the roaring twenties. At the end of world war one, a new era of prosperity came to America. At the heights of prosperity, the stock market exchange began to rapidly expand as more people began to trade. The Great Depression was caused by installment buying and the crash of the stock market. The first reason the Great Depression happened is that people were buying more than they can afford which is called installment buying.
A record 12.9 million shares were traded that day, known as “Black Thursday.” Five days later, on October 29 or “Black Tuesday,” some 16 million shares were traded after another wave of panic swept Wall Street. Millions of shares ended up worthless, and those investors who had bought stocks “on margin” (with borrowed money) were wiped out completely. As consumer confidence vanished in the wake of the stock market crash, the downturn in spending and investment led factories and other businesses to slow down production and begin firing their workers.
Imagine waking up on what seems to be a normal day. Just to find out that stock markets have crashed and all of your hard earned money is gone! Well, it happened. Thursday October 24, 1929 the Great Depression had begun. People lost nearly everything, lost jobs, lost the ability to do what they want when they want, and had to make major cutbacks.
The Great Depression was caused by a variety of factors. The first was the lack of diversity in the economy. Growth was very dependant on a limited number of industries, especially automobiles. Because the industries that were booming at the time did not have to be bought so often by consumers, those industrustries’ profits began to decline. From 1926 to 1929, consumer spending fell greatly, particularly in the construction and automobile industries.
The Great Depression is one of many big mistakes in history that is important to remember and learn from. A event that left 25% of Americans unemployed and many in so much debt that children had to skip meals. There’s no real crisis at hand to blame for this situation, so what caused the great depression in the 1930s? The Great Depression was caused by installment buying/speculation, maldistribution of income, and overproduction.
As you may know, The Great Depression was one of the worst economic downturns in U.S. history. There are many debates on what caused The Great Depression some examples are, corporate leaders blame the depression on the result of a lack of business confidence in businessmen and how they were reluctant to invest because they feared the government regulations and high taxes. The Hoover administration blamed international economic forces therefore which should stabilize the currency and debt structure. New dealers argued that the depression was due to under consuming and that low wages and high prices had made it difficult to find a product of the international economy and that the lack of determination had led to economic collapse. But I also believe that the main factor of the Great Depression was the stock market crash of 1929.
October 24th, 1929 the stock market crashed and the American world changed. This event is known as “Black Thursday". On Black Thursday, the banking system collapsed, and 25% of the labor force, around 12.8 million people at the time, became unemployed. “...prices and productivity levels had fallen 1/3 of their level in 1929.” With Americans having trouble finding work and the banking system struggling, people weren’t spending and saving money.
The Great Depression started in 1929-1939 and lasted for a decade. The cause of the Great Depression was the market crash. Americans were eager to get rich quickly so they started to buy stocks on margin but the plan backfired. Investors began to worry that the stock prices would fall so they began to sell off their stocks. Those who lent money depended to repay their loans.
October of 1929, the month that sent all of Wall Street into a panic and wiped out millions of investors across the United States. Steep declines in employment rates lead to failing companies and more than half of the country's banks, destroyed. The initial start of the great depression. Over the next 10 years, repossessions and foreclosure climbed, leaving many sleeping on the streets and struggling to collect food. The Great Depression found a grew the cracks of democracy in the United States triggering challenges to a great extent.
The Great Depression, which was an economic downfall that started in 1929, lasted about a decade, but what caused it to spread in the first place? There were many key factors that caused the Depression to start, but what really ignited the spread of it internationally was everyone's debt to each other. After World War 1, many countries depended on one another to try and recover because of everything they lost during the war itself. For example, Britain was destroyed completely and had no way of paying for things to be fixed. Their economy was in a slump after war so The United States stepped in to aid.
The Great Depression which had its reign in the 1930’s on the American economy. It was an era in time of extreme financial hardships that not only impacted the American government, but also its civilians. Since this period of time intersected with the tragedy of World War II, the Great Depression did not last as long as it could have. With the plethora of impacts that World War II made towards ending the Great Depression, this economic recession did not last as long as it would have without the war.
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.