The Great Depression from an Economic View

Essay by mxpx8990High School, 12th gradeB+, April 2007

download word file, 4 pages 4.0

The Great Depression was known as perhaps one of the greatest economic disasters of American history. Due to a crash in the stock market on October 29, 1929 the country was put into an economic turmoil. This caused a sharp decline in international trade, personal incomes, tax revenues, prices and profits. Cities that depended on Heavy industry such as Chicago and New York were hit the hardest. Construction was nearly haled in countries and crop prices had fell nearly 40 – 60 % putting farmers that relied on that crop as an economic resource out of work and without money. The Great Depression put millions of Americans out of work and caused many to rationalize their needs such as food, water, and shelter.

There are many reasons that the Great Depression even occurred and did as much economic damage as it did. Back in the 1900’s stock broachers allowed people to “buy on the margin” buying on the margin meant that you would only pay 10% of the shares you were buying in order to have them in your possession and owe the bank the other 90% plus interest later.

At first this was a good idea because many people were no longer afraid to invest all of their money in to stocks. This allowed for a major boost in the stock market for years to come, that is until the 29th of October 1929. The initial shock actually came a few days earlier on the 24th of October there was a crash in the market causing a slight panic but the market was believed to have been stabilized by that Sunday. The on the 29th known as black Tuesday the stock market plummeted. This caused an enormous panic among Americans that had invested their money into stocks,which was a...