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Was the Great depression well under way before the collapse of the stock market in October 1929?

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Introduction

Many saw the Wall Street crash as the beginning of the depression, however this isn't entirely realistic. It was responsible for a large contribution to the depression; but as the American economist Milton Friedman stated, "the stock market (crash) in 1929 played a role in the initial depression"1. However it is truly looked upon as the 'trigger' to the worldwide economic recession. I t can also be argued that the depression began to show signs of weaknesses before 1929. Before the actual Great Depression, the Harvard Economic Society and Galbraith believed, "the 'seven years of plenty' had run their course" 2, and generally believed that it was natural for prosperity to be followed by a slump, and named this as part of the economic cycle. This can support the fact that some experts expected an economic slump, as they believed that American prosperity balanced on very insecure foundations and that the economic infrastructure could not support such rapid expansion. The USA may have earned the short-lived name of the 'roaring twenties', and may have had Gross National Product that rose from $72.4 billion in 1919, to $104 billion in 1929. ...read more.

Middle

One example of how cultivation suffered was when the new prohibition laws were passed, this meant the grain trade suffered; this had to be accepted as a new era in which the farmers would have to eventually become accustomed to. This depression in agriculture in its own right was not a major sign of a 'general' depression, but Doug/Susan Willoughby stated, "1927...regarded as the year in which storm clouds began to appear over the American economy."5, which argues that there were many other issues that could have caused the Great depression. Joining the Farmers were the African-Americans, who suffered poverty before the Great Depression in 1929. George Schuyler, an African-American intellectual, commented during the Depression years that, "the reason the Depression didn't have the impact on the Negro that it had on the whites was that Negroes had been in the Depression all the time".6 As unemployment was low in the USA before the Great Depression, people were earning money to survive comfortably, and infact record numbers of people had a disposable income. Many people seemed to borrow extra money on 'easy credit' but this seemed fine as most citizens had employment with a reasonable income. ...read more.

Conclusion

As a consequence of this vicious circle, the countless citizens involved in the stock market began the 'panic selling of shares that brought America's golden age of prosperity to a close'. In conclusion, it is certainly not accurate to claim that the Great Depression was 'well under way' before 1929, despite the fact that the Agriculture, aswell as other areas of industry already suffering slumps in trade. A majority have agreed that Depression could not have been avoided as the Government stood by Laissez-faire politics, which provides no controls or protection for the economic structure that would allow the country and economy to thrive. In agreement to this John Hersch made a description about Governmental control, stating, "You had no Governmental control of margins...Anything went, and anything did go"8. 1 http://en.wikipedia.org/wiki/Great_Depression#The_Stock_Market_crash 2 The USA 1917-45 - Doug/Susan Willoughby 3 The USA 1917-45 - Doug/Susan Willoughby 4 The USA - 1917-45- Doug/Susan Willoughby 5 The USA - 1917-45- Doug/Susan Willoughby 6 The USA - 1917-45- Doug/Susan Willoughby 7 Prosperity, Depression and the New Deal - Peter Clements 8 Prosperity, Depression and the New Deal - Peter Clements ?? ?? ?? ?? Was the Great depression well under way before the collapse of the stock market in October 1929? ...read more.

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