What Cause the Great Depression?
There are many beliefs and reasons why the Great Depression happened and when did it occur. Overall the strongest belief of what caused the Great Depression was the crash of the stock market. Along with the the crash of the stock market other reasons of why the Great Depression happened were suggested to do overproduction, buying installments, and purchasing stocks.
One of the reasons of what caused the Great Depression was due to overproduction. Overproduction was one of the reasons of why the Great Depression happened because people would over work and sometimes the the prices would drop and farmers would lose money. In the third document they illustrate an image of a farmer being kicked out of his farm . They show a farmer being kicked out of his farm because they also show the price of cotton and wheat being smashed in the floor. The prices are being shown as being crashed into the floor because the price went down and the farmer did not get any profits off his production and goes broke.
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Buying on Margin was that investors would invest in others who would buy stocks. In the fourth Document it says “the Margin buyer was particularly vulnerable to even small decline in stock quotations. With any decrease in security values he would have to pay the additional money to cover the corresponding decreases in his collateral“. The quote explains how investors would lose money if their investment did not go well as they were expecting it to go as. Buying stocks on margin contributed to cause the Great Depression because if the the stock crashes, the investors would go out of money and would go broke at the end. This caused the Great Depression as well because they would go broke and lose their
The America in the 1930s was drastically different from the luxurious 1920s. The stock market had crashed to an all time low, unemployment was the highest the country had ever seen, and all American citizens were affected by it in some way or another. Franklin Delano Roosevelt’s New Deal was effective in addressing the issues of The Great Depression in the sense that it provided immediate relief to US citizens by lowering unemployment, increasing trust in the banks, getting Americans out of debt, and preventing future economic crisis from taking place through reform. Despite these efforts The New Deal failed to end the depression. In order for America to get out of this economic
Historians argue what caused the Great Depression, some say it was due to the stock market, others say it may be the war debt or overproduction. To believe the Great Depression was caused by only one event is naive. It was caused by a multitude of problems that the government failed to fix.
To begin with, the first cause of the Great Depression was the bank failures during that time. Prior to the Stock Market Crash of 1929, banks were renting out money to consumers without doing any kind of speculations. The people who rented the money would then go on and invest that money into the stock market not knowing it was going to crash. Once the market crashed, banks were dealt with a huge deficit
President Hoover believed that the primary cause of the Great Depression was World War One because of debts and reparations it created. Under the Versailles Treaty, Germany was liable to pay $33 million in reparations to France and Britain. To pay the money, Germany had to borrow money from American banks. Similarly, France and Britain also owed America $10 million, some of which they paid back with German reparations. Then, credit in America dried up and the economies of France and Britain also failed.
“By buying on margin, the investor had to pay only a fraction of the quoted price of any particular security”(Document 3). Within this quote holds what was the biggest reason for the crash of the stock market which was buying stocks on margin. Margins made it possible to pay as little as 10% down for a stock purchase, borrowing the rest from the stock seller or broker, and then the broker asked to borrow collateral from a friendly bank. This made people lose their smarts and they
The Great Depression time period took place between the years 1929 and 1939 and it affected millions of Americans through all its time. Several people like Herbert Hoover, Franklin Roosevelt, and Dorothea Lange served an impact during this time. The stock crash of this time period left a decade of consequences for the lives of many Americans. The economic plumet of the 1930’s can also be related to our economic standings today.
After a series of stock market crashes, the United States’ economy descended into a period of contraction. For more than ten years, the United States suffered through this state of economic despair also referred to as the Great Depression. President Herbert Hoover was in office at the time and found himself amongst the greatest era of economic declination. His response was to devise countermeasures to the depression that he felt would be most beneficial to the country. He began by requesting of large corporation heads to resist cutting employees’ wages and positions and instead reduce the margins of profit they accrued. He also pumped money into public works projects such as the construction of highways and government institutions. In addition
You may think of the job that you have now and think that it's great and you love it; but just think of how people thought back during the Great Depression . They had not a single job because their economy was so low. Many people were standing on the side of the road with a sign saying “ Need a job “ or there children would have signs saying “ Why won't you give my dad a job.”
Firstly, there are many factors that contributed to making the Great Depression start. Over-production and expansion was a problem because almost every industry was expanding in the 1920’s. Industries made products quickly that weren’t selling and in order to slow down
Many people think that the Great Depression was caused solely by the stock market crash. Anybody who tells you this probably didn’t pass U.S. History in high school. The fact is, the Great Depression was caused many different factors. Four of which were overproduction, uneven distribution of wealth, protective tariffs, and the four “sick industries” of the 1920’s.
Another cause of The Great Depression was drought conditions. The first sign that warned them was in the agricultural sector. Farm prices dropped because of production. Technology was
There were many causes of the Great Depression, but one of the biggest causes was over production. In the 1920s, companies were producing items such as radios and cars, but they were producing these items way too fast. Therefore, once a family had one car and one radio they did not need that item anymore. This made the demand for products go down, therefore, there was too much supply and the big businesses ended up laying off their employers. Moreover, more and more people weren't able to buy the cars or radios so after the people got laid off they were not able to buy the businesses products. The overproduction impacted the workers and big business as a whole. Since the overproduction was the very beginning of the cycle and impacted everyone,
“Well, the true cause of The Great Depression is still in discussion by economists. People believe the factors involved were, a drop in export prices and sales, a fall in overseas loans leading to a reduction in government capital spending, a drop in residential
After world war one, people were very happy that they still survived in the war. They already understand the war’s cruelty, and most of they refuse to have more wars. When men come home, they go find the jobs. At that time the economic was grow up into the high level. However, one of the most famous events is happened in that time which is 1929 was called the Great Depression. It is start of Black Tuesday which is the Wall street crash of 1929 on October 24,1929. The Great Depression is a wide-range of economic depression all around the world. How does the Great Depression happened in the 1929? There are still some people arguing about the main reasons of the great depression. Although I believed that it was happened by a lot of causes such as, inflation and bank failures, I think the main reason for the great depression is over producing.
From the reading passage, it is firstly stated that the Stock Market crashed during the Black Tuesday and this event triggered the Great Depression. According to the lecturer, after a period of growth, the economy started to slow down in the late 1920s when some business started to fail. Therefore, with profit margins shrinking, the Stock Market collapsed in 1929 causing companies and citizens to lose a huge amount of capital in short period of time.