The Great Depression: The Crash Of The New York City Stock Exchange

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The Great Depression was arguably the most severe and influential economic crisis of 20th century America. Historians and economists have speculated as to the causation of the Depression since its occurrence. While it could be argued that the crash of the New York City Stock Exchange (NYCSE) on October 19, 1929 was the main contributing cause of the great depression, it can be seen that the crash was “more of a symptom than a cause” and that combined factors such as government mismanagement, failure in agriculture, and failure in manufacturing were the leading cause to a greater extent.

The crash of the NYCSE on October 19, 1929 is often considered to have ended the age of the “Roaring Twenties” and plunged America into the Great Depression.
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These problems can be tied to overproduction that occurred as a result of World War One. The economies of the European allied countries had been exhausted by the costs of the war. Over the course of the war Europe was heavily bombed and their industry, including agriculture, was largely destroyed. The United States however had not been bombed and it capitalized to help support the allied countries and dominate the European industry during the war. “Before the war U.S. farmers produced less than 690,000 bushels of wheat yearly, but by the war’s end they were producing 945,000 bushels per year.” This mass production kept up even after the war had ended and the European countries had restored most of their agriculture. However, President Coolidge failed to address the problems created by the farming surplus and vetoed the two suggested versions of the McNary Haugen bills that cleared congress. He then failed to come up with an alternative plan, which worsened the crisis in the 1920’s. In the 1920’s, agriculture made up 25% to 30% of the U.S. work force. 30% of the population was going into debt due to the crop surplus that had been created. They had to take out loans in order to buy seeds and equipment, but they could not afford to pay the loans back. This weakened the local banks. Between the years 1921 and 1929 an average of more than 600 banks failed per year.

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