The Great Depression originated in the United States with the stock market crash on October 29, 1929. The depression was the biggest economic fall in American’s history. This crash stretched throughout the globe and affected the rich as well as the poor. There were many causes that assisted in bringing the depression into existence. However one of the main causes was the disproportionate riches during the nineteen-twenties. The gap between the rich and the working class people was the enlarged industrialize production during this period. Also in this period production cost fell quickly, wages rose slowly and prices remained steady.
The government contributed to this gap. The federal income taxes were reduced dramatically by the Revenue Act in nineteen-twenty six. Therefore the rich did not have to pay a lot of taxes on their annual income.
The poor and middle class populations were spending much of their annual incomes to buy consumer goods, even though the average yearly income was less than twenty five hundred. Although the rich were making purchases it did not affect them. With this imbalance, America began to rely on credit and extravagant spending and investment from the rich. This growing inequality of the wealth between the wealthy and poor made the United States economy unstable.
Many people believe the Stock Market crash and the Great Depression are one in the same. In the nineteen twenties the Dow Jones went from sixty to four hundred. People became instant millionaires. Trading became America’s favorite pastime and a quick way to get rich. There were Americans...