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, banking problem, industrial power houses and agricultural depression which
ultimately lead to the infamous Stock Market Crash of 1929. The “roaring twenties” was
an era when our country prospered greatly. The rapid increase in industrialization was
fueling growth in the economy, and technology improvements had the leading
economists living that the uprise would continue. During this boom period, wages
increased along with consumer spending and stock prices began to rise as well. Billions
of dollars were invested in the stock market as people began speculation on the rising
stock prices and buying on margin.
On Thursday, October 24, 1929, the bottom began to fall out. Prices dropped
continually as more and more investors tried to sell their holdings. By the end of the day,
the New York Stock Exchange had lost four billion dollars, and it took the exchange
clerks until five o’clock in the morning the next day to clear all the transactions (Hicks 9)
Following Monday the realization of what had happened began to sink in, and a
full-blown panic set in. Thousands of investors-- many of them ordinary working people,
not serious “players -- were financially ruined. by the end of the year stock values had
dropped by fifteen billion dollars (McElvaine 45).
Many of the banks which had speculated heavily with their deposits were wiped
out by the falling prices, and these bank failures sparked run on the banking system.
Each failed bank, factory, business, and investor contributed to the downward spiral that
would drag the world into the Great Depression (Hicks 22).
During the “roaring twenties” which is commonly known as the Jazz Age, their
was an obvious attitude that was for living for the moment. “Americans in the Roaring
Twenties turned inward, away form international issues and social concerns and toward
greater individualism. The emphasis was on getting rich and enjoying new fads, new
inventions and new ideas. (Hiebert 73). The traditional values of rural America were
being challenged by the infamous Jazz Age, what symbolized what is shocking behavior
of young women who wore short skirts and makeup, smoked and drank. The self
centered attitudes of the 1920’s seemed to fit perfectly with he needs of the economy.
Modern industry had the capacity to prodded vast quantities of consumer goods, but this
created a problem: Prosperity could continue only if demand was made to grow as rapidly
as supply(Heibert 74). People had now been looking away from traditional values such
as saving, postponing pleasures and purchases, and buying only what they needed (Hicks
99). New advertising methods were used to persuade people to buy new...