The Major Factors Of The Great Depression

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The Great Depression was a sad, dark period in the History of the United States. The Great Depression lasted from 1929-1939 and had many factors of why it was the worst economic depression in the history of the United States. Some of these elements include, The Stock Market Crash of 1929, Bank Failures, and reduction in purchasing across the board.
Capital is the tools needed to produce things of value out of raw materials. Buildings and machines are common examples of capital. A factory is a building with machines for making goods. During the twentieth century, most of the capital in the United States was represented by stocks. A corporation owned capital. Ownership of the corporation in turn took the form of shares of stock. Each share of
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From 1920 to 1929 the value of the stock rose by more than four times. Many investors began to think that stocks were a great thing to have, so they began to borrow more and invest more money in the market.
But in 1929, stocks began to decline. In 1932 and 1933, stocks hit rock bottom, down about 80 percent from their highs in the late 1920s. This had sharp effects on the economy. Demand for goods declined because people felt poor because of their losses in the stock market. New investments could not be financed through the sale of stock, because no one was interested in buying new stock. Perhaps the most important effect was in the banking system. As banks tried to collect on loans made to stock market investors whose holdings were now worth little to nothing at all. Even worse, many banks had themselves invested in the stock market by depositors’ money in the stock market. When Franklin D. Roosevelt began to be president in March 1933, the banking system of the United States has largely ceased to function. Depositors had seen 140 billion dollars disappear when their banks failed. Businesses could not get credit for inventory. Checks could not be used for payments because no one knew which checks were worthless and which were
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The Stock Market Crash started on October 29th, 1929 when “Black Tuesday” hit Wall Street as investors traded around 16 million shares on the New York Stock Exchange in a single day. Thousands of investors were wiped out that day as billions of dollars were lost. After “Black Tuesday” hit America and the rest of the industrialized world worsened into the Great Depression. The Great Depression was known as the deepest and long-lasting economic downturn in the history of the Western industrialized world up to that time. During the 1920s, the United States stock market underwent rapid expansion, reaching its peak in August 19929, after a period of wild speculation. By then, production has already declined and unemployment had risen, leaving stocks in great excess of their real value. Among the other causes of the eventual market collapse were low wages, the proliferation of debt, a struggling agricultural sector and an excess of large bank loans that could not be liquidated. A second known cause of The Great Depression is Bank Failures. Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and people lost their savings that was in the bank. Surviving banks, unsure of the economic situation and concerned for their own survival, being as willing to create new

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