The Great Depression was a terrible event in American History. There are many things that triggered this event. They are: Stock Market Crash, Bank Failures, Laissez-Faire, Drought Conditions.
Stock Market Crash:
Many people say that this was the trigger to the Great Depression. The crash occurred on October 29, 1929 this day is known as Black Tuesday. When the crash occurred the stock holders lost over 40 billion dollars. So the people who had money in the market lost a lot of money. On the day that the stock market crashed the stocks on average fell 33 points. With stocks falling so much and people were buying these stocks on credit. The credit was 10%, so they only had to pay 10 percent of the stock. When it crashed people lost all of there money and they couldn't pay off the stock.
Bank Failures:
After the crash people were already down from that whole deal than the banks started failing. All across the country over 9,000 banks failed. The deposits that people were making were uninsured, so when the banks started losing all of their money(failing) the peoples savings were gone. The banks that did survive didn’t want to make new loans out to people.
Laissez- Faire:
The term Laissez-Faire means not allowing the government to be involved in business. The way this contributed to the Great Depression was because in the 1920s The government was not allowed to overlook the stock market. So people were creating monopolies (this is when one company takes over all the business and doesn’t allow competition so they can charge anything they want). Since the government was not over-watching the market they didn’t have anything backing up the money.
Drought Conditions:
Personally when I heard that the drought contributed to the Great Depression I personally thought that it was not true. But, after reading I understood and it really was a big cause. With the drought in the Mississippi Valley the farmers were not making any money, because their crops weren’t growing, so they had to sell their farms. When they sold their farms they made no profit and couldn’t pay there taxes.
Story of the Stock Market:
On the day of the crash the ticker really got behind. What I mean by behind was that it was 2 and half hours behind the original time so the stocks were falling so people were rushing to sell their stocks so they could still at least come out even if not make some money. Since people were worried about selling their stocks they weren’t buying any stock. On the day it is said that over 16.4 million shares of stock were sold. On July, 8,1932 the DOW JONES Industrial Average fell to 41.22 It is now at 11,674.76.
After the crash many things occurred: Many people lost all of their savings, a whole bunch of companies were ruined, the banks had no trust from the people.
http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm
http://www.huppi.com/kangaroo/Causes.htm
http://eh.net/encyclopedia/article/Bierman.crash
http://www.google.com/finance?hl=en&tab=we
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