Although there were countless key influences causing the Great Depression, the aftershock of World War One was key at provoking the sequential events which led to and caused the Great Depression during the 1930’s. Instantaneously, the aftermath of World War One left psychological scars on everyone causing many to grieve and act impulsively by filling the void of a lost loved one with newfound wealth acquired from the stock market. Also, with the war finally over and soldiers returning home, a new era was finally beginning; new and better goods were on their way to being manufactured. With all of this in mind, people were excited for this new era with new and better things. This excited companies into over-expanding and overproducing to the
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With the loss of a loved one, numerous psychological effects can happen to a person. One of the many things that can happen is getting addicting to something that fills the emptiness in their life such as gambling. With the discovery of the stock market, many who may have been in despair over losing loved ones may have found a source of happiness and comfort in the idea of making money—all with just a little bit of luck and hope that the value of their stocks would continue to rise. Since gambling dens were usually illegal, the legal way that someone could gamble was to invest a great deal of time and money into the stock …show more content…
However, there was a way around this tricky problem, buying on margin. Buying on margin is borrowing money from a broker with a promise that the money is only a loan and that it will be paid back at a later date. Frequently, people bought on margin, borrowing countless amounts of money as the stock market continued to rise. Little did they know however that banks and brokers were being informed that they were to start collecting loans and debts as early as February 1929.V By this point in time, people were beginning to realize just how much trouble they were really in and began to panic. Almost all of the public tried to sell their stocks and assets at the same time in order to pay off their loans but, in order to meet the margin requirements, some were required to pay more than what they were loaned which meant that they had to sell other assets as well to try and pay off all of their debt, which many could not do. As people sold their stocks all at once, their value decreased quickly to one tenth of their original value. VI Stocks continued to drop in value until the date referred to as ‘Black Tuesday’ was reached. This is when the stock market crashed. This was the beginning of the Great
With the loss of a loved one, numerous psychological effects can happen to a person. One of the many things that can happen is getting addicting to something that fills the emptiness in their life such as gambling. With the discovery of the stock market, many who may have been in despair over losing loved ones may have found a source of happiness and comfort in the idea of making money—all with just a little bit of luck and hope that the value of their stocks would continue to rise. Since gambling dens were usually illegal, the legal way that someone could gamble was to invest a great deal of time and money into the stock …show more content…
However, there was a way around this tricky problem, buying on margin. Buying on margin is borrowing money from a broker with a promise that the money is only a loan and that it will be paid back at a later date. Frequently, people bought on margin, borrowing countless amounts of money as the stock market continued to rise. Little did they know however that banks and brokers were being informed that they were to start collecting loans and debts as early as February 1929.V By this point in time, people were beginning to realize just how much trouble they were really in and began to panic. Almost all of the public tried to sell their stocks and assets at the same time in order to pay off their loans but, in order to meet the margin requirements, some were required to pay more than what they were loaned which meant that they had to sell other assets as well to try and pay off all of their debt, which many could not do. As people sold their stocks all at once, their value decreased quickly to one tenth of their original value. VI Stocks continued to drop in value until the date referred to as ‘Black Tuesday’ was reached. This is when the stock market crashed. This was the beginning of the Great