Causes of the Great Depression
English Comp. 1301
Throughout the 1920s, new industries and new methods of production led to wealth and 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. However, this great prosperity ended in the fall of 1929, which marked the beginning of an era known as the Great Depression (Carrol). The Great Depression of the thirties remains to this day as the most important economic event in American history. It caused enormous hardship for tens of millions of people and the failure of a large fraction of the nation’s banks, businesses, and farms. The stock market crash in October 1929 is believed to be the immediate cause of the Great Depression, but there were many other factors and long-term causes that developed in the years prior to the depression. The various causes of the Great Depression include the stock market crash, unemployment, bank failures, and drought conditions.
The Stock Market Crash of 1929
The stock market crash of 1929, also known as Black Tuesday, occurred in late October and was the most devastating stock market crash in the history of the United States, when taking into consideration the full extent and duration of its fallout. Most would say that this enormous crash was one of the major causes that led to the Great Depression (Kelly).
Although the stock market has the reputation of being a risky investment, it did not appear that way in the 1920s. With the mood of the country exuberant, the stock market seemed an infallible investment in the future. The stock market soared throughout the 1920s, and the more it grew, the more eager people were to pour their money into it. Many people bought "on margin," which meant they paid only part of a stock's worth when they bought it, and the rest when they sold it. That worked fine as long as stock...
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