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Table of Content
What is the Great Depression Essay
As the saying goes, money makes the world go ‘round. Many think of it as nothing more than an old saying, but in many ways it holds true. America, along with the rest of the world, learned this the hard way almost ninety years ago.In 1929 the stock market crashed, triggering the worst depression ever in U.S. history that lasted for about a decade. This period is known as the Great Depression.
Do not let the name fool you, the only thing “great” about this period was just how widespread it was. The Great Depression is a defining moment in time for not only America but the rest of the world as well. This was a time that caused political, economic, and social unrest. Not only did the Great Depression cause worldwide panic, but it also caused a worldwide crisis unlike any before it. Although the popular belief is that the main cause was the crashing Stock Market in 1929, there were other major economic events that contributed just as much as the crash.
As these events transpired, the state of economic crisis in the US began to skyrocket.
One cause people tend to gloss over is overproduction, American businesses both industrious and agricultural alike found themselves producing much more than needed with the mindset that more products mean more profit. Huge supplies of goods were simply stockpiled in hopes that it would sell. This process was known as overproduction and created a huge problem for the United States.Agricultural production was rising dangerously high during the early 1920s. They were overproducing food since World War I to meet soldier demands. Herbert Hoover was the nation’s federal government food administer during the war, he strongly encouraged a rise in production due to Europe’s lacking production Before the war, U.S.
farmers produced less than 690,000 bushels of wheat yearly, but by the war’s end, they were producing 945,000 bushels per year. After the war, the U.S.
What Led to the Great Depression Essay
The Great Depression was a very hard time for many Americans. There were some factors that led to the Great Depression such as:stock market crash, the purchasing of goods declined, and the loss of trade with foreign countries.During the Great Depression, many people lost their jobs and were not able to support their families. They had to beg for money and even sleep in the streets. Many children didn’t handle this period of time well. Some children ran away from home to seek a better life.
The country was in chaos during the Great Depression.
One of the main causes of the Great Depression was the crash of the stock market. It was 1929, and Herbert Hoover had just been elected president. During the years before, the stock market had been good and everyone wanted their piece of the profits. Millions of people owned stock in different companies. Also, many people in various financial situations owned stock.
It seemed to be a very easy way to make money. On September 3, 1929, the stock market hit
a record high which resulted in more people buying stock but on October 24, 1929, that changed and the market slowly began to fall. The people who owned stocks initially didn’t panic because they thought the stocks would rise again like they did before. They were wrong this time.
On October 29, the stock market crashed. Stock owners rushed to try to sell their stock, but nobody could buy them. This day became known as Black Tuesday. The crash of the stock market affected millions of Americans because companies depended on shareholders for support but now those shareholders had financial problems. Thousands of employees had to be fired because the companies could not afford to pay them.
Many factories, mines, and businesses were forced to close their doors due to this crisis. Another cause of the Great Depression was the decline in purchasing goods. After the stock market crashed, people from all classes stopped making purchases.
Causes of The Great Depression Essay
The Great Depression started in 1929 and lasted ten years. It was a time of great suffrage for the American people because the economy failed miserably due to many complications. Hence, why it is difficult to determine the cause of The Great Depression, It was a chain reaction snowballing into a really big problem in dire need of a solution. The Great Depression took off after the Stock Market crashed in October 1929 also known as Black Tuesday, the day Wall Street went into a panic while wiping out millions of unfortunate investors. This contributed to what left America in ruins for a whole decade.
In 1933, the nation had peaked unemployment rates as high as 25%. This was the most miserable decade America has ever seen.
The Stock Market Crash of 1929 is said and speculated to have been the major economy killer of the 1930’s. But it was not the worst contributions to the Great Depression as it is not who did it first, but the one who had the greatest impact that is to take the blame. On Oct 24 1929 known as Black Thursday 16 million shares were traded. a couple days later on what was known as Black Tuesday 16 million more shares were traded by the panicked public. How did this affect the economy? Consequently, They were all wiped out.
At the same time, Stock prices continued to rise. Moreover, this will affect banks majorly and at some point causing Bank to ultimately fail.
As previously mentioned, The Stock Market Crash caused the closure of multiple banks. Moreover, when many panicked Americans insisted on getting loans out of debt. That caused banks to run out of money especially when the Government wasn’t helping with money. With so many people taking out their money, banks ultimately went dry, and the American people were not insured to have money. In the 1930’s, more than 9,000 banks had closed due to this.
By 1933, $140 billion disappeared due to the banks failing.