The Crash of 1929 and the Depression that Followed: Was it Avoidable?

1708 words - 7 pages ✓ Expert Reviewed
VIEW DOCUMENT
Preview

"No one can possibly have lived through the Great Depression without being scared by it. No amount of experience can convince someone who has lived through it that the world is economically safe." - Isaac AsimovThe Great Stock Market Crash of 1929 and the Depression that followed is perhaps one of the most memorable and unforgettable events in the 19th century. The economy began to pick up after World War I. The nation was looking for easy money to compensate for the losses in the war. The stock market became the answer. Best of all, anyone could do it; just borrow money on margin, invest it in a company, and receive a big return. Shares continued to rise as with the number of investors. But no boom lasts forever and accordingly, the "inflating stock bubble" had to burst sooner or later. On Thursday, October 24, 1929, also known as "Black Thursday," the crash began. A record of 17 million stocks changed hands. Investors scrambled to sell their investments at a fraction of the price. An estimated loss of $26 million occurred that day. America was sent into a state of insecurity, panic, and poverty - Depression. The Great Depression is not only important to those that lived during the 1920s and 30s, but also to the present population and economy. Economists, advisors, and investors are careful not to allow history repeat itself. Hence, "Was the Crash and Depression avoidable?" No. In the early stages of the post-war boom, problems with the economy were already introduced. Unfortunately, nothing could be done to fix them. Particularly, the large portion of "artificial" stock trading and the maldistribution of income and wealth could only lead to disaster - which would be the unavoidable Crash of 1929 that would lead to the Great Depression.After the first World War ended in 1918, the damaged economy slowly repaired itself.. A slow, but steady boom was in effect. The new trend among Americans was to invest in the stock market. It was seen as an easy, no-risk, fast money making scheme where everything went up and nothing went down."The higher the share rose in value, the more investors thought it was a good buy. The trouble was that share prices climbed beyond their real value in terms of the dividends they might produce. To make matters worse, Americans were tending to buy shares instead of making long-term investments. This lack of secure investment reduced the spending power of those who might have bought surplus goods. The rocketing stock market was therefore making a crash all the more inevitable." (Ross, p. 33, 1998)More and more placed their life savings into the hands of the stock market without learning about the system. This led to an increasing flood of uneducated investors focussing only on easy money. The market became the perfect place for fraud and swindling. Bankers, brokers, traders, and sometimes...

Find Another Essay On The Crash of 1929 and the Depression that Followed: Was it Avoidable?

Parallels Between Your Forces Of The 1929 Wall Street Crash And The Existing Credit Crisis

1283 words - 5 pages The purpose of this essay is to explore the parallels between the underlying factors which led to the 1929 Wall Street Crash and the present Credit Crunch. The 1929 Wall Street crash was caused by weaknesses in the US economy. After WW1 the USA experienced a decade of economic growth generated by the levels of mass production and industrial growth during the war years. This along with the popular culture of success (the Jazz and party scene...

The Labour Governments Of 1924 And 1929-31 Demonstrated That The Labour Party Was Fit To Govern

1207 words - 5 pages country, but just, simply whether they could rule at all. By 1931, and the fall of the Labour government, after the Wall street crash, the country was in serious economic problems, and appeared that the Labour government had failed, but was it there fault, was there anything they failed to do to stop the depression, and did they succeed in proving that they had become a major political force, which could directly compete...

The Causes Behind The Stock Market Crash Of 1929

1390 words - 6 pages from $27 billion in 1925 to $87 billion in 1929 but in-turn also decreased the stock prices again causing a 73% drop from 1929 to 1932 (Sparknotes). There was little or no government control in market affairs causing chaos in the economy and turmoil between traders. External factors that caused fear and instability for investors and in the country triggered plummeting prices. Although the causes of the crash made it unavoidable, its aftermath...

The Great Depression (1929-1939)

1471 words - 6 pages is an effect of a monetary policy in which the prices of goods and services fall to make it less advantageous for business to continue operation. For example, according to author Charles Kindleberger of The World in Depression, 1929-1939, the annual percentage change in wholesale prices between 1929 and 1930 are as followed: “U.S -12.2%, France -6.7%, Japan -22.3%, Canada -16%, U.K -14.9%, Germany -10.8%, and Italy -14.3%” (Kindlerberger, p. 114...

Gives An Overview Of The "Bay Of Pigs Invasion" Why It Failed While The Repercussions That Followed

1524 words - 6 pages would surface. The CIA was initially confident that it was capable of overthrowing Castro, having experience assisting in the removal of other foreign governments such as those of Iranian prime minister Mohammed Mossadegh in 1953 and Guatemalan president Jacobo Arbenz Guzmán in 1954. Richard Bissell, Jr., one of Allen Dulles three aides, was made director of "...

Crash of 1929 Video Review

713 words - 3 pages at a celebration hosted by Henry Ford. Three days later, on October 24, the stock market crashed dramatically, but not nearly as badly as it would five days later. Some rich investors managed to keep the market up until October 29, 1929, when the market crashed entirely. Roger Babson was one of Wall Street’s most outspoken critics. He claimed repeatedly that the market would crash at some point and, as such, investors jumped all over him and...

Inventory Market Crash Of 1929

1105 words - 4 pages The United States signaled a new era after the end of World War 1; an era of hopefulness when many people invested their money that was under the mattresses at home or in the bank. In the 1920s, the stock market reputation did not appear to be a risky investment, until 1929. First noticeable in 1925, the stock market prices began to rise as more people invested their money. During 1925 and 1926, the stock prices vacillated but in 1927, it had an...

The American Civil War Was Avoidable

1139 words - 5 pages The American Civil War was Avoidable      The explosion of the American Civil War was caused by a vast number of conflicting principles and prejudices, fueled by sectional differences, and set afire by a very unfortunate set of political events. Undoubtedly, the central theme of almost all of the events that led up to the Civil War was one way or another, related to the dispute of slavery. Throughout the nineteenth century, slavery-related...

A Plan Of Canada During The Great Depression, And How It Was One Of Canada's Many Devastating Periods Of History.

2794 words - 11 pages huge burden of economic hardship.Many Industries were hit very hard during the 1930's. With the New York stock market crash the value of stocks and product were falling fast and so were the demands for the goods and services. This caused many business firms to cease to exist. Although everybody in Canada was greatly affected by the Great Depression, it was those who depended on the primary industries that were hit the...

Stock Market Crash & The Great Depression

2207 words - 9 pages America skyrocketed and was on the road to restoration.After the devastating market crash back in 1929 and the Great Depression many wondered if it could happen again. On Aug. 25, 1987 the stock market peaked, a new all time high in the Dow, up 25.35 points to a record of 2722.42. This story was buried on page 41 of the Wall Street Journal not even worthy of a mention on page 1. In the days between October 14 & October 19, 1987, major...

Wall Street Crash Of October 1929

3668 words - 15 pages , the bottom of the New York stock market fell out, an event that would lead the world into the greatest depression it has ever seen to date. Many individuals including those in the Federal Reserve Board saw the crash as a healthy thing that would bring all speculative trading to an end, and bring stock prices down to “realistic” levels. Following the crash the Fed followed a contractionary policy, which does not encourage expansion. Although...

Other The Crash of 1929 and the Depression that Followed: Was it Avoidable? Essays

The Stock Market Crash Of 1929

1346 words - 5 pages market then they had and they would bet that the share prices would go up also. When the stock market crashed in 1929 various banks lost a lot of money. The crash only lasted four days but still had a large effect on the world. The people who would deposit money into those banks heard about what had happen and feared there money would be lost. Everyone panicked and tried to get their money out of the bank because they heard the bank was not a...

The Stock Market Crash Of 1929

862 words - 3 pages Why is the Stock Market Crash of 1929 so memorable? There were bigger crashes with bigger consequences, so why? Why is this crash ingrained in every American’s brain? It was the starting point of the drastic change in every American’s life. The stock market crash happened between The Roaring Twenties, a period known for its fashion and growth, and the Great Depression, years of unemployment and starvation. This essay will be about the components...

The Stock Market Crash of 1929

1652 words - 7 pages rise as more people invested their money. During 1925 and 1926, the stock prices vacillated but in 1927, it had an upward trend. The stock market boom had started by 1928. The stock market was no longer a long-term investment because the boom changed the investor’s way of thinking (“The Stock Market Crash of 1929”). The Stock Market Crash of 1929 was a mass hysteria because of people investing without any prior knowledge and the after effects that...

The Stock Marketplace Crash Of 1929.

915 words - 4 pages goes to show, that there are many lessons to be learned from the stock market crash of 1929. At the end of the 1920's, there were signs that the economy was headed toward a downturn, but few people heeded these warnings. When the stock market crashed in October of 1929, many investors were wiped out. Soon, the country would be plunged into the dark days of the Great Depression. If the warning signs wouldn't have been ignored like they were, the stock market crash may not have happened and our economy may not be as it is today....