Causes of The Great Depression Essay - 1592 Words

The Great Depression It is said that the cause of the catastrophic stock market crash known as the great depression was due mostly to uncontrolled political and industrial systems otherwise known as capitalism. However, the timeline leading up to the Great Depression proves that many other factors played a role in the stock market crash that occurred in the decade of the 1930s. So lets take a look at rather four, factors contributing to the great depression that we will further discuss in the following paragraphs. Four of the main causes that led up to the great depression were unequal distribution of wealth, uncontrolled political and industrial systems, high tariffs and war debts. Money was distributed mostly between the†¦show more content†¦The rising incomes of the wealthiest Americans fueled rapid growth in the stock market (see Stock Exchange), especially between 1927 and 1929. Soon the prices of stocks were rising far beyond the worth of the shares of the companies they represented. People were willing to pay inflated prices because they believed the stock prices would continue to rise and they could soon sell their stocks at a profit. In the 1920s decade, during World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession or relation to the rest of the economy results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy. An average of 600 banks fail each year. Agricultural, energy and coal mining sectors continue to drop. Textiles, shoes, shipbuilding and railroads decline. The value of farmland falls from 30 to 40 percent between 1920 and 1929. Organized labor declines throughout the decade. The United Mine Workers Union will saw its membership fall from 500,000 in 1920 to 75,000 in 1928. The American Federation of Labor would fall from 5.1 million in 1920 to 3.4 million in 1929. Technological unemployment enters the nations vocabulary, 200,000 workers a year are replaced by automatic or semi-automaticShow MoreRelatedCauses Of The Great Depression1319 Words   |  6 Pageshaving classic satisfying life concluded when the Great Depression ushered in the negative trend that would impact the U.S. economy in 1929. Therefore, what happened? In this essay, we will discuss what the Great Depression was for the Americans, the causes of the Great Depression, and the U.S.’s recovery from the Great Depression. The Great Depression One of the terrifying times in the U.S. history is the Great Depression. The Great Depression is an economic phenomenon, which according to theRead MoreGreat Depression and Its Causes1256 Words   |  6 PagesThe causes of the Great Depression of the 1920s and 1930s has been argued about for generations. Most people agree on several key topics and that it was the severity and length of time the Depression lasted that was actually the most remarkable. Hoover made many noteworthy attempts to try and solve this crisis, yet in the end it was President Roosevelt and his New Deal, that brought many Americans hope for the future. The first factor in the start of the Depression was the lack of diversityRead MoreCauses of the Great Depression2012 Words   |  9 Pages The causes of the Great Depression in the early 20th century is a matter of active debate between economists. Although the popular belief is that the main cause was the crashing Stock Market in 1929 caused the Great Depression, There were other major economic events that contributed just as much as the crash, such as American’s overextension of credit, an unequal distribution of wealth, over production of goods, and a severe drop in business revenue. As these events transpired the state of economicRead More Causes of the Great Depression Essay1143 Words   |  5 PagesCauses of the Great Depression Throughout the 1920’s, new industries and new methods of production led to prosperity in America. America was able to use its great supply of raw materials to produce steel, chemicals, glass, and machinery that became the foundation of an enormous boom in consumer goods (Samuelson, 2). Many US citizens invested on the stock market, speculating to make a quick profit. This great prosperity ended in October 1929. 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Most historians agree it was a chain of events, one after another, that brought our country into chaos. Some events were more impactful than others. These events caused pandemonium amongRead MoreEssay on The Causes of the Great Depression697 Words   |  3 PagesThe Causes of The Great Depression History Imagine waking up one morning, only to find out that all your investments and savings are gone. So if your bank that you invested all your money in collapsed, you didn’t get any money back. This is what happened to millions of Americans during the 1930s. This era was called the great depression. The great depression was one of the worst economy issues we have ever had in history. It was a hard time for everyone. The great depression started in 1929Read More The Cause of the Great Depression Essay552 Words   |  3 PagesThe Cause of the Great Depression The economic expansion of the 1920’s, with its increased production of goods and high profits, culminated in immense consumer speculation that collapsed with disastrous results in 1929 causing America’s Great Depression. There were a number or contributing factors to the depression, with the largest and most important one being a general loss of confidence in the American economy. The reason it escalated was a general misunderstanding of recessions byRead MoreCauses Of The Great Depression And The Great Recession2292 Words   |  10 Pages1. Examine the causes of the Great Depression of the 1930s and consider what similarities and differences can be drawn with the problems from the financial and economic crisis which began in 2008. Introduction 2007-2009 in America has often been described as the worst economic crisis since the Great Depression in 1929. There was lots of debate whether the economy was slipping back to double dip recession but there is considerable evidence that the economic crisis in 2008 is worse than the crisisRead MoreCauses of the Great Depression Essay651 Words   |  3 PagesIn the 1920s, American economy had a great time. The vast majority of Americans in 1929 foresaw a continuation of the dizzying economic growth that had taken place in most of the decade. However, the prices of stock crested in early September of 1929. The price of stock fell gradually during most of September and early October. On â€Å"Black Tuesday† 29 October 1929, the stock market fell by forty points. After that, a historically great and long economic depression started and lasted until the start of