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The Great Depression

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Introduction

The Great Depression began in October 1929, when the stock market in the United States dropped rapidly. Thousands of investors lost large sums of money and many lost everything. The crash led us into the Great Depression. The period of the great depression ranked as the longest and worst period of high unemployment and low business activity in modern times. Banks, stores, and factories were closed and left millions of Americans jobless, homeless, and broke. Many people came to depend on the government or charity to provide them with food. There were several causes of the great depression including bank failures, the stock market crash, and unequal distribution of wealth, economic policies, overproduction, and drought conditions. The 3 major cause of the depression was the stock market crash, bank failures, and distribution of wealth The stock market crash of 1929 helped trigger weaknesses of the American economy. On Black Tuesday, investors panicked and dumped an unprecedented 16 million shares. ...read more.

Middle

Hundreds of banks failed during the first months of the Great Depression, which produced an even greater panic and rush to withdraw private savings.2 In the first 10 months of 1930 alone 744 US banks went bankrupt and savers lost their savings. Banks became desperate to raise money so they tried to call in their loans before people had time to repay them. As banks went bankrupt, it only increased the demand for other savers to withdraw money from banks. People waited in long lines to withdraw their savings were a common sight during the crisis time. The government appeared unable to stop bank runs and the collapse in confidence in the banking system.3 Because of the banking crisis, Banks reduced lending and that lead to there was a fall in investment. People lost savings and that lead to reduces of consumer spending. The economic impact of the great depression was disastrous. Over the time period 9,000 banks went bankrupt of closed their doors to avoid bankruptcy. ...read more.

Conclusion

From 1923-1929 the average output per worker increased 32%. During that same period of time average wages for manufacturing jobs increased only 8%. The production costs fell, wages rose slowly, and prices remained constant. The benefit of the increased productivity went into corporate profits. The federal government also played a part in this gap between the rich and middle-class. Calvin Coolidge's administration favored business. With his Revenue Act of 1926 greatly reduced federal income and inheritance taxes. The act encouraged excessive spending which was a problem in the long run. 7 The Great Depression was an economic slump in North America, Europe, and other industrialized areas of the world that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world. There were many factors of the great depression. I believe the stock market crash, bank failures, and the unequal distribution of wealth were the main causes of the depression. If these 3 factors did not occur in the great depression then the U.S. would have had a greater chance of the great depression never happing in the first place. ...read more.

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