Stock Market Crash Causes And Effects

753 Words 4 Pages
Matthew Santos
K. Baldwin
US History 1
23 January 2018

The Stock Market Crash of 1929 is one of the Most Important Events in US History. Analyze at least 3 Causes and 3 Effects

One of the biggest catalysts for the Great Depression was the Stock Market Crash of 1929. The stock market crash was devastating to investors and businesses alike, however, the reason why the crash happened was a combination of both sides and their lack of caution in terms of the overall condition of the economy, and strict federal policies that accelerated the crash. The effects were devastating; both the stock market business and investors lost large fractions of their money, while banks began failing due to the economic instability brought by the crash. The first
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After the crash, civilians attempted to withdraw all the money they could, but it was too late; the banks already ran out of money due to their bonds not being paid. Matter of fact, banks were hit so hard the by the time Roosevelt took office, banks were mostly nonfunctional (Agadoni). Investors were hit hard, as well; brokers called in their loans the second the market crashed, so investors had to scramble just to pay off their debts. Their entire life's savings, everything they owned even, were sold off just to pay off their bonds (Amandeo). Thus, there was no more money to put into the economy, as people couldn't afford to buy stocks, goods, cars, etc. The stock market business itself also saw an additional consequence foreign to that of the others; lack of confidence. After it crashed, investors simply didn't see the appeal or use of stocks anymore. Faith in wall street fell. Some investors, like Carlton Shively, attempted to market the idea that the stock market was a cycle, and that the market would be booming once this part of the cycle blows over (Shively 1). Despite this, civilians were still hesitant to invest. The Stock Market Crash of 1929 was tragic, but a necessary, event. It was the result of consumers putting too much faith into short-term solutions and banks. The effects were devastating to the American Economy, to the point of where many blame the crash as the spark of the depression. Though the validity of that statement is hotly debated today, all can agree that the crash will be forever remembered. Not because it has already happened, but because it is destined to happen

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