Causes of the Great Depression
One of the main reason of the Great Depression was the stock market crash of 1929. This officially happened on October, 29 1929, it was known was known as Black Tuesday. It was the day New York’s stock exchange crashed. It crashed because the stocks were worth more then they actually worth, then the stocks dropped drastically. Also the roaring 20’s led up to the crash. For example the economy was really good and people thought it would continue, so they invested all their money in hopes that they would become rich, but instead they went broke.
Another reason was bank failure. By 1933 11,000 out of the 25,000 banks still standing had disappeared. When people saw what happened on Black Tuesday they immediately withdrew their deposits from the bank. Leaving the bank with no money lend, which meant the banks went bankrupt.
Reduction in purchasing was a third reason of the Great Depression. With the stock market crash people were afraid of more economic trouble so people stopped buying. Less buying means less things being purchased, which in turn affects the work force. Without jobs people were not able to pay items that were purchased trough installment plans, and their things were repossessed.
A fourth reason was the American Economic policy with Europe. The Smoot-Hawley Tariff raised taxes on foreign merchandise to help out the American businesses. By raisin taxes imported goods made Americans buy American Products.
Finally the fifth reason of many more was the drought conditions, although this was not a direct cauromse of the Great Depression. The drought occurred in Mississippi valley also known as the Dust Bowl. It was so bad that people had to sell their farms for no profit for themselves. Many farmers had no choice but to move to cities.
I cant imagine how bad it must of been on people back then especially on the fathers, since they had the responsibility of the whole family. Even some of the rich people went f the top of the food chain the bottom. I think people shouldn’t have been so comfortable with stocks in the 1920’s , and thought it was going to keep getting better. As you can see the opposite happened.
Causes of the Stock market crash of 1929
One of the reason the stock market crashed was because of agriculture recession. Better technology increased supply, but that lead to over production. In effect the prices fell and so did the farmers wages. They had to sell their farm, sometimes for no profit for themselves, and had to move to the city which wasn't much better.
A second reason was what you could call a boom and bust. The roaring 20’s led to false expectations which then led to the crash. Investors believed they would become super rich; since the years leading to 1929 proved great wealth. So when things started going down hill investors cashed in their profits.
Another reason was the miss match between production and consumption. Great techniques were invented that created production cheaply for example the car. Consumption of expensive cars and goods barely kept up. So over production happened and businesses struggled to sell their products
A fourth reason was the inequality that going on. Benefits of economic growth were not evenly distributed. Employees earned up to 2,000 dollars a year, wealth was not evenly distributed. So if people did not have much money they could not buy things.
In my opinion one of the things that led up to the crash was greed. People were barely paid anything, so i guess that back fired to the big businesses. I’m glad that today people get paid a lot more then back then, with really good benefits.
Depression in the cities.
With all the farmers losing their farms they were forced to move into the cities which wasn't much better. In the cities people were jobless and out of money, and unable to pay rent. About 17,000 people were evicted from their homes and put in the streets. Many cities ran out of money and instead of paying with money they paid with food. Charities were formed based on volunteering bu could not provide much.
When people were evicted from their homes they moved into shacks of boxes and scraps of lumber. Shady towns were called Hoovervilles because they blamed President Hoover for what was happening to them. Their homes had no electricity or running water,which is why they lived by rivers. If a shelter was built well enough it could be sold for 50 dollars.
Many men unable to provide for their familie, they felt ashamed and they abandoned their family. This men were known as vegans or hobos. They wondered the streets begging for jobs, which hundreds just like them were looking for. When the got the courage and sucked up their pride they ended up in bread lines. The lines were so long that they had to wait three hours. Before eating they had to sit through a 20-30 minute sermon, and then they would go eat tasteless soup.
Wow! these people really had it really hard. In my opinion no matter how hard things get the worst you can do is abandon your family. They already have it bad enough, imagine how worse it got for them when the man in charge leaves. Fortunately today there is awesome organizations that help out the poor.
Comments
Well done Cesar!