causes of the depression

Causes of the Great Depression Since the start of the Industrial Revolution early in the nineteenth century the United States has underwent numerous recessions or panic. None of them were as a serve or endured as long as the Great Depression. There has been much argument over what were the causes of the Great Depression. Following in the 1930’s, the depression remains the most important economic experience in the United States history. There are many factors that caused the Great depression: one of the causes was structural weakness and specific events that turned it into a major depression. One of the main causes of the Great Depression was the stock market crashing on the 29th of October in 1929. Throughout the 1920s, the U.S. stock market undertook instant expansion, reaching its peak in August 1929, after a period of wild speculation. Speculation eventually led to the market dropping 12 percent because so many people were buying stocks to sell them for quick money.[1] This made their price go up, making them cost more than they were actually worth, and soon no one wanted to buy them. By then, production had already declined and unemployment had risen, leaving stocks in great excess of their value. The unemployment rates skyrocketed from 3 percent to 25 percent.[2] Among the other causes of the eventual market collapse were low wages, the proliferation of debt, a struggling agricultural sector and an excess of large bank loans that could not be liquidated. “Over $40 billion dollars was lost by stockholders”.[3] Even though the stock market started to recover some of its losses by the end of 1930, it just wasn’t enough and America truly entered what is called the Great Depression. Bank failures were another contributor to the Depression. The run on America’s banks began immediately following the stock market crash of 1929. Throughout the 1930’s over 9,000 banks failed.[4] The depositors in these banks lost nearly 20 percent of

Bibliography: aldwell, Jean, and Timothy G. O 'Driscoll. "What Caused the Great Depression?." Social Education 71, no. 2 (March 2007): 70-74. Academic Search Premier, EBSCOhost (accessed December 22, 2013).Henretta, James A. and David Brody. America: A Concise History, Volume 2: Since 1877. 4th ed., Boston: Bedford/St. Martin’s, 2010.[1] Henretta, James A. and David Brody. America: A Concise History, Volume 2: Since 1877. 4th ed., Boston: Bedford/St. Martin’s, 2010 pg. 685[2] Ibid[3] Ibid[4] Ibid pg. 685[5] Caldwell, Jean, and Timothy G. O 'Driscoll. "What Caused the Great Depression?." Social Education 71, no. 2 (March 2007): 70-74. Academic Search Premier, EBSCOhost[6] Caldwell, Jean, and Timothy G. O 'Driscoll. "What Caused the Great Depression?." Social Education 71, no. 2 (March 2007): 70-74. Academic Search Premier, EBSCOhost pg. 71[7] Henretta, James A. and David Brody. America: A Concise History, Volume 2: Since 1877. 4th ed., Boston: Bedford/St. Martin’s, 2010. Pg. 686[8] Ibid pg. 72[9] Ibid pg. 72