Causes Of The Great Depression Essay

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Basic Causes of the Great Depression

The Great Depression was the longest American slump in the economy to ever occur. The Great Depression lasted for about a decade between 1929 and 1939, the dates of the Stock Market Crash of 1929 and the starting of World War II. A number of factors actually caused the Great Depression. One commonly known factor said to have caused the Great Depression is the Stock Market Crash of 1929, although this is not directly correct. The market crash was only a symptom of, as well as a transition into, the Great Depression. Other symptoms and causes includes, wealth inequality, overproduction, stock speculation, excess loaning, deflation, unemployment, and no profits.

Throughout the roaring 1920s there was …show more content…

In the 1920s, it seemed as if the stock market was the safest and easiest way of gaining money. When people heard of this, they started to purchase stocks as well, but by stock speculation. Stock speculation was the purchasing of stocks without any knowledge of the company’s financial situation, meaning people just assumed that every stock would give them a profit. To make matters worse, banks began loaning out money to investors, in order for them to purchase stocks. Soon enough, in early 1929, banks were receiving many warnings about loaning too much money. However, this did not pose a real threat to banks or investors, for they thought that the stock market was just going to keep on going up. Unfortunately, this was not the …show more content…

On Black Thursday, October 24th, investors and stock brokers began to panic. They bought many shares of stocks, hoping to balance out the market. However, though balancing the market was many people’s intention, this was not the case. On Black Tuesday, October 25th, stock prices collapsed completely, and billions of dollars were lost.

A result of the Stock Market Crash of 1929 was many, many bank failures. These banks failed because, the Stock Market Crash of 1929 was the cause of debt and poverty for many people. People had no money to pay back the banks, and no money to deposit into the banks. Whatever money was left in the banks got withdrawn because people were afraid that they would lose it, just like others lost all their money to the market crash. By 1933, 11,000 of America’s 25,000 banks had closed and weren’t in existence

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