The Great Depression Of 1929 Essay

The stock market could not stay stabilized when such a huge amount of money was borrowed from it. Analysts found out that in 1929, almost 5% of the total value of the stock market was due to margin buying.
The federal policies are also to be blamed as said by the analysts. The prevailing president of the Federal Reserve Board, Mr. Adolph Miller introduced very strict monetary policies. The rates of interest on the broker loans were unnaturally increased making it all the more difficult for the investors. Bad banking structure can also be blamed for the great depression of 1929. There was huge number of new banks that were cropping up every single day. The restrictions that were imposed by the federation weren’t good enough. They didn’t have any regulation to determine the minimum capital required to start up a bank or any rules regarding the amount of reserves that was allowed to be lent. Obviously most of these banks were insolvent and were closing at an equally faster rate as they were opening up. When the market crashed in 1929, the situations became worse. These banks which had invested in stocks heavily couldn’t were perished due to the market crash.

There were many reasons that caused the great depression of 1929. The foremost reason has to be the overvalued stocks, which led to the crashing of the stock market. The stock market crash of 1929 was the most significant market crash in U.S. history. though the crash lasted only four days, it led to a catastrophic…