The Great Depression And The Collapse Of The Stock Market Essay

1192 Words Jan 29th, 2016 5 Pages
The Great Depression, spanning from 1929-1939, was a period of great turmoil in the United States. A depression is a sustained, long term period in which the economy is failing. The Great Depression was caused by the collapse of the Stock Market and the failure of the Banks. The reason why the crash of the Stock Market was so impactful to our economy was because of the speculative nature of the Market. Many people bought stocks on margin, which meant that they only paid 10% for the stock while loaning the rest from the bank. This method of investing with the bank’s money became very popular and many people bought stocks on margin without debating the consequences. Finally, on Black Thursday, the stock market crashed, and many lost their life savings and all of the bank’s money. Since many of the stocks were bought with the bank 's money, the banks also went bankrupt, crippling the financial savings of those who did not participate in the stock market. When elected in 1928, President Herbert Hoover failed to improve the American Economy because he believed in rugged individualism, the theory that the people were self reliant and were able to help themselves. Hoover prolonged the Great Depression by not doing anything to try to solve the depression, instead believing that the economy was going to help itself. It was up to Franklin Delano Roosevelt, the newly elected President, with his try anything approach and the New Deal, to successfully end the Great Depression and spark…

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