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The Great Depression Essay

1662 words - 7 pages

The Great Depression The Great Depression was the worst economic fall ever in U.S. history. The Depression began 1929 and lasted for about a decade. Many factors played a role in bringing the depression. However the Stock Market Crash in October 1929 is often brought forward as the beginning of the Great Depression, but did it actually cause it? The answer would be no. The main cause for the Great Depression was an unequal distribution of wealth throughout 1920's and a wide stock market speculation. The imbalance of wealth created an unstable economy. The speculation of stock market in late 1920's led to large market crashes. These crashes combined with unequal distribution of wealth, caused the American economy to capsize. The value of shares had risen greatly. This was called a "Bull Market" since investors believed in benefiting in profit only from buying shares. About one million people had investments. October 24, "Black Thursday", when prices started falling dramatically, and by June 8, 1932 share prices hit their lowest.In Source A, you can see what were the values of the shares just before the crisis, when suddenly after the big fall the share prices of the same big businesses like General Motors were twelve times less.Source B, which is by New York Times 1929. The Newspaper, comments on the huge losses of companies. Many accounts were just "wiped out". The newspaper also comments on the lack of government support and backing. So from this we can conclude that country and its people were left on their own, to survive. A graph, that shows the rise and fall of the share prices in Source C, shows how the rise was steady till late 1929. When suddenly something snatched and everything just started sinking, till it got the lowest value ever possible. This took less than two years. Also, Source I, was commented by Bailyn Dallec in 1992, states that the collapse of "Bull Market" did trigger the Depression overall. Since the consumption dropped businesses were out of function, bankrupts in farming, banking and businesses.In his statement Dallec mentioned the entire main financial pipes, which hold the country's economy. Since all of them were out of function the minor ones went down as well. This actually did lead to further problems. Many companies closed down so a lot of people were left without work. Twelve million Americans were unemployed and the number grew up by 12 000 every day. As you can see in Source D, which indicates that there was a multifault for the Depression. Workers got really poor wages compared to the small amount of people that were very rich. Farmers with their farms were wiped out, as well as the factory workers and company employers. There is a reason behind it. The wealth was unbalanced. The major number of people lived in poverty while very little were really rich. The demand for the goods fell; therefore factories made less, received no...

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