What Are The Causes Of The Great Depression Essay

Introduction The Great Depression (1929-39) is known as the deepest, most pervasive and longest-lasting economic downturn in the American history and also in the history of the Western industrialized world. The effects of the depression were massively felt in virtually all corner of the world as it was one of the greatest economic disasters in history. The Great Depression’s timing greatly varied across the nations, but in a good number of countries it started in 1929 but lasted until the late 1930s. In the U.S., the world’s deadliest economic downturn began soon after the crash of the stock market of October 1929. The stock market crash sent Wall Street into a panic and also wiped out millions of investors. This day was called “Black Thursday” in the history of the United States. The New York stock market crashed because individuals that had the stock wanted to sell them, and no one was willing to buy. During the roaring twenties, people had spent more on investment, and could no longer pay off their debts and loans, which resulted in the urge to sell their stocks. The following several years experienced a drop in investment …show more content…
Throughout the 1930s, more than 9000 banks failed. As banks failed, individuals lost their savings because banks deposits were not insured. Surviving banks stopped their willingness to create loans because they were not sure about the economic situation but more concerned with their survival. This even exacerbated the situation thus resulting in less and fewer expenditures causing the depression. The stock market crash, as well as bank failures, decreased the spending power of the stockholders who lost money. The stock market crash on Black Tuesday wiped out many investments of individuals and understandably shook the public. And when the failure of the banks erased the savings of individuals who did not invest in the stock market, people were