Causes of the Great Depression
The great depression was the worst economic depression in US History. It was a huge financial decline that started in 1929 that lasted into early 1940s. Many “businesses and banks closed their doors, people lost their jobs, homes, and savings and many depended on charity to survive.” It occurred in North America and Europe but affected countries around the world. Times became very hard in many countries where unemployed and homelessness rose tremendously. Even construction stopped in many areas. The Great Depression was the most severe and lasted the longest in the United States. Many people wondered what caused it to happen. However there was a combination of domestic and worldwide conditions that caused it. Some of the top reasons that historians and economists said why the Great Depression occurred are Stock Market Crash of 1929, Bank Failures, Reduction in Purchasing Across the board, American Economic Policy with Europe, and Drought Conditions. After nearly a decade of optimism and prosperity, the United States was thrown into despair on Black Tuesday, October 29, 1929, the day the stock market crashed and the official beginning of the Great Depression. As stock prices plummeted with no hope of recovery, panic struck. Masses and masses of people tried to sell their stock, but no one was buying. The stock market, which had appeared to be the surest way to become rich, quickly became the path to bankruptcy. And yet, the Stock Market Crash was just the beginning. Since many banks had also invested large portions of their clients' savings in the stock market, these banks were forced to close when the stock market crashed. Seeing a few banks close caused another panic across the country. Afraid they would lose their own savings, people rushed to banks that were still open to withdraw their money. This massive withdrawal of cash caused additional banks to close. Since there was no way for a bank's clients to recover any of their...
Please join StudyMode to read the full document