The Great Depression The great depression in the 1920s was a direct result of peoples’ ignorance and greed of that time. The great depression was the worst economic down fall to ever hit the united states and the rest of the industrialized world. The great depression did not have a single source to blame there was a multitude of reasons why it happened. The main reason why the great depression happened was because of the mentality of the average consumer and businessman in the 1920s. the ignorance and greed that was displayed then is happening again now in modern day life. Buy now and pay later. Get rich quick and work less. The 1920s was considered the party age, after winning ww1 money was abundant, this led to consumers having the opportunity …show more content…
Stocks were cheap and considered a good investment, this led to millions of Americans pouring their money into stocks. The stocks were so affordable that anyone could buy a piece and have a chance of making a large sum of cash. The writers of history.com say that the reason why the stock market crashed was because it expanded too rapidly and couldn’t be controlled (“The Great Depression” par. 3). The stock market was expanding at a rapid rate, stocks were becoming more expensive than their actual worth, and this led to a major decline in customers buying stock shares. History.com states that the stocks prices were much higher than their actual value, they became a bad investment (“Stock Market” par. 2). Wages were also starting to decline, and unemployment had already been on the rise. Consumers didn’t want to invest into the stock market anymore. Workers were getting laid off and struggling to even find the lowest paying of jobs. People had to be smarter with their money and didn’t have the money to waste on over priced stocks. According to the writers of history.com people stopped buying stocks and they began to question where their money was going (“The Great Depression” par. 6). Investors began to speculate whether they’d get their money back, they lost trust in the stock market. History.com states that a wide spread panic caused many investors to trade their shares by the millions on October …show more content…
Herbert Hoover the president at the time, made Americas situation worse despite his efforts to fix it. The writers of history.com say that Hoover refused to directly help citizens and instead helped banks and big business believing the rest would work its self out (“The Great Depression” par. 10). Franklin D. Roosevelt’s election was the turning point, he inspired Americans and got to work right away. Roosevelt began creating programs to fix the economy immediately after entering the white house. History.com states that he directly started to help citizens by setting up programs to provide jobs, housing, and food for struggling workers and families with his plan he called the “new deal” (“FDR the Great” par. 8). FDR picked his battles wisely and led the U.S. out of the great depression. Roosevelt entered WW2 to boost the economy by joining Great Britain and creating more jobs in factories with mass production of weapons and supplies for the war according to history.com (“FDR the Great” par. 13). FDR was an American
The stock market crash of 1929 was one of the main causes of the Great Depression. Before the stock market crash, many people bought on margin, which caused the stock market to become very unbalanced, which led to the crash. Many people had invested heavily in the stock market during the 1920’s. All of these people who invested in the stock market lost all the money they had, since they relied on the stock market so much. The stock market crash also played a more physiological role in causing the Great Depression.
People who didn’t have the money bought on margin. The stock market was booming and the excitement about the market caused a lot of over- speculation. People ignored the small signs of the impending crash until Black Thursday, October 24, 1929. Four days later, the stock market fell again. At first, the effects of the crash were felt by people who had invested a great deal of money in stocks, which was about four million people out of a population of one hundred and twenty million people.
The Great Depression was due to the stock market crashing and the fear of risking what was left and decided to but a pause on any economic activity. Throughout this time period we elected two Presidents, Herbert Hoover and Franklin D. Roosevelt. Throughout the Depression Roosevelt had the most effective policies than Hoover.
There were many causes for the Great Depression. The first and one of the largest was the stock market crash. Before 1929 the stock market was flourishing and everyone wanted to buy stocks. People were so confident in the stock market that they were buying “on margin”, which meant that brokers would lend them 10% of the money they invested (D1). The problems began when stocks were being over speculated. When people began to realize this, they began selling there shares. On October 29, 1929, 16 million shares were sold (D9). This day became known as “Black Thursday”, the day the stock market crashed (D12). The second reason was the overproduction of goods. Factories had already produced too many goods and now there was no demand for them. The government began to raise tariffs to protect Canadian industries but things only led downhill from there.
The 1920s were a time of leisure and carelessness. The Great War had ended in 1918 and everyone was eager to return to some semblance of normalcy. The end of the war and the horrors and atrocities that it resulted in now faced millions of people. This caused a backlash against traditional values and morals as people began to denounce the complex for a return to simplicity and minimalism. Easily obtainable credit and rapidly rising stock prices prompted many to invest, resulting in big payoffs and newfound wealth for many. However, overproduction and inflated stock prices increased by corrupt industrialists culminated until the inevitable collapse of the stock market in 1929.
The Great Depression was a period, which seemed to go out of control. The crashing of the stock markets left most Canadians unemployed and in debt, prairie farmers suffered immensely with the inability to produce valuable crops, and the Canadian Government and World War II became influential factors in the ending of the Great Depression.
During 1928, the stock market continued to roar, as average price rose and trading grew; however as speculative fever grew more intense, the market began to fall apart around 1929. After the stock market crash, a period began that lasted for a full decade, from 1929 to 1939, where the nation plunged into the severest and the most prolonged economic depression in history - the Great Depression. During this inevitable period, the economy plummeted and the unemployment rate skyrocketed due to poor economic diversification, uneven distribution of wealth and poor international debt structure.
There is no doubt that the stock market crash contributed to the great depression, but how? One way that the Crash contributed to the depression was the loss of money it caused to the average man. It is believed that in the first day of the crash almost a billion dollars were lost, this took a large amount out of the pocket of the common man. Without this money people were unable to purchase consumer goods, which the United States economy was based on. Another way the Crash contributed to the depression was the loss of confidence in the market. When t...
The causes of the Great Depression of the 1920's and 1930's has been argued about for generations. Most people agree on several key topics and that it was the severity and length of time the Depression lasted that was actually the most remarkable. Hoover made many noteworthy attempts to try and solve this crisis, yet in the end it was President Roosevelt and his "New Deal", that brought many Americans hope for the future.
The Great Depression was in no way the only depression the country has ever seen, but it was one of the worst economic downfalls in the United States. As for North America and the United States, the Great Depression was the worst it had ever seen. In addition to North America, the Depression greatly affected Europe and other various countries throughout the world significantly during the 1920’s and 1930’s. The Great Depression was caused by the collapse of the Stock Market, which happened in October of 1929. The crash exhausted about forty percent of the paper values of common stocks. It was the worst depression due to the fact that at the time of the Great Depression the government involvement in the economy was higher than it had ever been. A unique government agency had been set up exclusively to prevent depressions and their related troubles for instance bank panics. All of ...
Great Depression was one of the most severe economic situation the world had ever seen. It all started during late 1929 and lasted till 1939. Although, the origin of depression was United Sattes but with US Economy being highly correlated with global economy, the ill efffects were seen in the whole world with high unemployment, low production and deflation. Overall it was the most severe depression ever faced by western industrialized world. Stock Market Crashes, Bank Failures and a lot more, left the governments ineffective and this lead the global economy to what we call today- ‘’Great Depression’’.(Rockoff). As for the cause and what lead to Great Depression, the issue is still in debate among eminent economists, but the crux provides evidence that the worst ever depression ever expereinced by Global Economy stemed from multiple causes which are as follows:
October 29th, 1929 marked the beginning of the Great Depression, a depression that forever changed the United States of America. The Stock Market collapse was unavoidable considering the lavish life style of the 1920’s. Some of the ominous signs leading up to the crash was that there was a high unemployment rate, automobile sales were down, and many farms were failing. Consumerism played a key role in the Stock Market Crash of 1929 because Americans speculated on the stocks hoping they would grow in their favor. They would invest in these stocks at a low rate which gave them a false sense of wealth causing them to invest in even more stocks at the same low rate. When they purchased these stocks at this low rate they never made enough money to pay it all back, therefore contributing to the crash of 1929. Also contributing to the crash was the over production of consumer goods. When companies began to mass produce goods they did not not need as many workers so they fired them. Even though there was an abundance of goods mass produced and at a cheap price because of that, so many people now had no jobs so the goods were not being purchased. Even though, from 1920 to 1929, consumerism and overproduction partially caused the Great Depression, the unequal distribution of wealth and income was the most significant catalyst.
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.
Another issue that caused the market to drop has to do with America’s finances. In the 1920’s, stock prices were getting out of hand. Many investors were buying stocks on margin:
The Great Depression was a period of first-time decline in economic movement. It occurred between the years 1929 and 1939. It was the worst and longest economic breakdown in history. The Wall Street stock market crash started the Great Depression; it had terrible effects on the country (United States of America). When the stock market started failing many factories closed production of all types of good. Businesses and banks started closing down and farmers fell into bankruptcy. Many people lost everything, their jobs, their savings, and homes. More than thirteen million people were unemployed.