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DID THE WALL STREET CRASH CAUSE THE GREAT DEPRESSION

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Introduction

DID THE WALL STREET CRASH CAUSE THE GREAT DEPRESSION? In this essay I will be explaining the causes of the Great Depression The Wall Street Crash was the drop in share prices in 1929.The Great Depression was the period in the 1930's when the USA and other countries like Germany suffered a great deal of poverty i.e. hunger, unemployment, homelessness. Throughout this essay it will be explained how the Wall Street crash was a cause of the Great Depression but it was not the only cause as there were many other factors that also led to the Great Depression. I think the next long term cause was of the Great Depression was the inequality between the rich and the poor. This was a long-term cause because there was inequality between the rich and the poor from the start and the poor were already in depression long before the crash. This also happened because the government did not tax the rich much this meant that there were no rules to help the poor i.e. the farmers until 1919 they were fairly prosperous but during the 1920s boom they faced ruin. They were overproducing as they had all this new machinery allow them to produce a lot more but all this extra food went to waste as supply was exceeding demand. ...read more.

Middle

The government could have had control over this by limiting the amount of money they could lend to the people. Actions of the speculators was another short term linked to the action of the banks as the banks were the reason the speculators were borrowing so much money. Action of the speculators is also connected with over confidence, because in the 1920s the speculators were so confident that the share prices would keep rising. This a cause of the Great Depression because they were borrowing so much money from the banks and the banks were lending the speculators all this money out of other peoples savings, which meant when the Wall Street Crash occurred the people who had savings in the banks and had nothing to do with the share buying and selling they lost all of their money because the banks had lent the money to the speculators. Also the speculators were also buying on the margin, which meant the speculators were paying only a ten percent of what the share price was and the banks were paying the other ninety percent. When the Wall Street Crash occurred the banks wanted their money back and because the speculators could not give it back the banks started to take the property and homes this left most of the people in America homeless. ...read more.

Conclusion

wanted their money back and because the Americans could not pay them back the banks started to take the property and land of the people in order to take back the money they were owed. Also a lot of people had invested their savings on the stock market and this meant when they were selling them they did not get back what they had invested therefore they lost a lot of money as the value of the shares was not worth a lot now. So they would sell their shares for less money then they had originally invested in the stock market therefore this created poverty, which led to the Great Depression. The other problem was the banks did not have enough money to help the businesses that were in trouble. This was because they had lent too much money to everybody that they did not have enough left in the banks themselves. Because the banks did have the money to lend out they started to ask the people they had loaned the money to back, because the people did not have the money and therefore could not give it back the banks took the property of the people which left them homeless this was how their debt got paid back. ?? ?? ?? ?? Aamnah Sarwar 4 Year 10 History Coursework-USA ...read more.

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