Great Depression Of The 1930s Research Paper

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The 1930’s are remembered to be one of the hardest times in history for the American people. countless amount of people lost their life savings, lost their jobs, and had no way of making income. People thought that industrialization was booming during the 1920s and the country did not expect to be left in a state of economic depression during the 1930s. Many people were left bankrupt due to the economic downturn, which was caused because of the economic effects of the 1920's. Many people were even left to starve as a result of the mines and mills being abandoned, factories closing, farms and homes going into foreclosure. Humans could barely have a stable life during this time period; they could barely take care of their own family, sometimes …show more content…

Over 9,000 banks failed during the late 1920’s, taking $7 billion in assets from depositors in addition to the financial failures of the previous year. There were too many banks opening in the early 1920s and they lacked stability for depositors, which led to the failure of banks in the late 1920s. When a bank fails, depositors are essentially left with nothing. Millions of Americans lost their whole life savings as a result of the bank failures. Additionally, when the stock market crashed in the late 1920s, the assets of small banks were leased out to speculators in the stock market, causing many banks to fail almost immediately. In the article, Why Do Banks Fail? Evidence From the 1920's, by Lee J. Alston, Wayne A. Grove, and David C. Wheelock states that there were "because bankers have little of their own capital exposed, the absence of monitoring by depositors encourages banks to undertake more risky investments than they would otherwise. Indeed, fraud may become more prevalent as bankers find it easier to escape immediate detection." A majority of the country had their money in the banks, which they thought were …show more content…

The Great Depression, the longest and worst economic downturn in global history, struck the United States and the rest of the industrialized world after the events of Black Tuesday. Many factors contributed to the 1929 stock market crash, such as overvalued stocks, increased bank lending, excessive agricultural production, panic selling, excessive stock buying, rising interest rates, and negative media coverage. During the early 1920's, speculation, easy borrowing, and an overall feeling of excitement among investors drove the skyrocketing stock values. There was a widespread belief that the stock market would increase forever, resulting in an enormous spike in stock prices during the depression. In the article “Stock Market Crash of 1929” by the National Oceanic and Atmospheric Administration, it is presented that “the prosperous 1920s ushered in a feeling of euphoria among middle-class and wealthy Americans, and people began to speculate on wilder investments.” The booming 1920s provided a false sense of reality for what the economy would be like and caused investors to become more sure that they would reach

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