There are many causes that led to the Great Depression. The global and American economy were in turmoil six months prior to black Tuesday, October 29, 1929, the stock market crash in 1929 is what had aggravated the Great Depression which set the rest of the causes to lead to The Great Depression. Such as devious banking and credit, overproduction, uneven distribution of wealth, and the dust bowls.
September 3, 1929, the Dow Jones financial system was at height of 381 points, October 29,1929, it had fallen to 41 points after a week of panic sellings. Black Tuesday hit Wall Street while investors traded 16 million shares on the New York Stock Exchange in one select day. Billions of dollars were gone within a single day, wiping out thousands of investors. Americans and the rest of the industrialized world decreased rapidly into the Great Depression (1929-1939), the most dramatic long-lasted economic down roar in the history of Western industrialized world. The U.S.
stock market underwent fast development, reaching the climax August of 1929, after a period of speculation. By then unemployment had already risen and production was decreased, leaving stocks in excess of their real value. After black Tuesday stock prices had nowhere to go but up, so there was recovery during succeeding weeks. However, prices still dropped as the U.S. fell into the Great Depression.
By 1932 stocks were only worth about 20% of their value in summer 1929. The stock market crash wasn’t the sole cause of the depression, but did open up the global economic collapse.
Causes of the Great Depression Causes of the Great Depression Causes of the Great Depression
Devious banking was another successful cause for the Great Depression. The real estate and banks that had invested a lot in the stock market had lost their depositors money. People panicked as they lined up at the banks to get their money, for many, only to find out their money wasn’t there. Deflation hit as the amount of money in circulation dropped.
2nd Essay Sample on Causes of the Great Depression
The Great Depression was the worst economic slump ever in U.S. history, and one that spread to virtually the entire industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920’s. Another reasons for the stock market crash was caused Farmers continued to produce more and more food due to technological advances likes the tractor.
As production grew farm prices dropped. It was simply a matter of supply and demand. Also a big drought turned that portion of America into what was called “The Dustbowl.” The theory was that an indicator of money and easy credit stimulated the economy. In 1927, the Federal Reserve Board further inflated the currency by creating several more billion dollars. People went into debt, and the prices of real estate and stocks skyrocketed.
The policies pursued by Coolidge made the later stock market crash inevitable and depression inescapable. Also, there was an uneven trade going on between the U.S. and the rest of the world. There were more exports than there were imports. This meant that the U.S.
was loosing money and goods other than receiving.