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Great Depression Essay

  • Submitted by: tonnyc
  • on April 16, 2015
  • Category: History
  • Length: 3,700 words

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Below is an essay on "Great Depression" from Anti Essays, your source for research papers, essays, and term paper examples.

The Great Depression and the New Deal (1929-1939)
Causes and Effects of the Depression
Wall Street Crash
  * Stock prices were rising, a “boom” in people buying stocks, people doubling $ in less than 2 yrs
  * Oct 1929, stock market crashed and all money was lost
Black Thursday and Tuesday
  * Oct 24-Black Thursday-a volume of selling and stock prices plunged, Tuesday-bankers bought millions of stocks to hopefully get the selling frenzy started again, it did work for fri/mon, but bankers couldn’t find anyone to buy stocks, Dow Jones falling
Causes of the Crash
Uneven Distribution of Income
  * Only top 5% of Americans received over 335 of all income
  * Demand for products declined, businesses lay off people, worse and worse
Stock Market Speculation
  * Many people thought that they could get rich by playing the stock market, many looked for quick profit on stock market
  * Buying on margin- allowed people to borrow most of the stock, making payments of 10%. When market crashed, everything lost and barrowed was lost.
Excessive Use of Credit
  * Increase in barrowing and installment buying = defaults on loans and bank failures
Overproduction of Consumer Goods
  * Production of goods were not purchased due to stagnant wages
Weak Farm Economy
  * Farmers suffered from overproduction, high debt, and low prices
Govt Policies
  * Govt didn’t want to regulate business, had high tariffs to protect American industries, but hurt farmers and international trade
  * People blame Federal Reserve for tight money policies since they only tried to control the gold standard. People tried to get $ out of banks which made them fail even more
Global Economic Problems
  * US insisted on loan repayment in full and high tariffs on Europe which weakened it and contributed to depression
Effects
  * GDP dropped in half, national income declined by 50%, 20% of banks closed, $ supply contracted by 30%, 13mil unemployed (25%)
  * Crash = no republican...

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