The Great Depression Essay

714 words - 3 pages

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The Great Depression


Causes of the Great Depression 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 and 30's, and the


extensive stock market speculation that took place during the 1930's. These were not


only the factors of the great depression, structural weaknesses and the fact that most of


the other countries were affected just kept the depression going were also played a


part. The resulting period ranked as the longest and worst period of high unemployment


and low business activity in modern times. The Great Depression was the worst


economic slump ever in U.S. history, and one that spread to virtually the entire


industrialized world. Banks, stores, and factories were closed and left millions of


Americans jobless, homeless, and penniless. Many people came to depend on the


government or charity to provide them with food. It led to a sharp decrease in world


trade as each country tried to protect their own industries and products by raising tariffs


on imported goods. The economy continued to fall almost every month. At first the stock


market was an important but not the dominant influence. But however, by 1929 the


market became the symbol of the nation's prosperity and an icon of American business


culture. Everything was going great; the stock prices reached what looked to be a


permanently high plateau. In September of that year the market began to slide, but


people ignored the sign. But on October 29, 1929, "Black Tuesday", the stock market


took a huge fall. More than 16 million shares changed hands in frantic trading. Investors


soon realized they were heavily in debt so they started to sell their stocks, which led to


others doing the same. That was the start of all the panic, everyone started selling but

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most of them couldn't find buyers. The impact of "Black Tuesday" led to bank failures


because speculators who had borrowed from banks to buy their stocks could not repay


the loans because they could not sell their stocks. This was the main start of the


depression, because it not only wiped out the savings of thousands of Americans, it hurt


commercial banks that had invested in the corporate stocks. Many of the middle class


people lost their life savings and had no other...

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