The main cause of the Great Depression

The main cause of the Great Depression

The Great Depression is known as the worst economic situation the U.S has ever seen. The event known as Black Tuesday which occurs on October 29th, 1929 happens to be the most detrimental stock market crash ever to be recorded. From this, billions dollars were lost and thousands of investors were wiped out following 16,410,030 trades shared. After this monumental collapse the country truly was in panic. The stock market crash of 1929 was the main cause and spark of the Great Depression because of its significant effect on the economy and banks around the country.

                                                                                         

Now there was other causes that contributed to the Great Depression but the damage it caused was not as severe as the stock market crash of 1929. After the crash, the Depression immediately started because of the effects the crash had on America. The crash wiped out people's businesses and the unemployment rate skyrocketed to 25%. The U.S economic growth decreased by 50% and world trade plummeted 65%.  After the crash, the banks collapsed and people were literally runningto the bank to get their money back.   

                                                                                      The market in the first place could not hold its own because of the amount of borrowed money that was involved. This problem proved to be monumental as certain reform acts had to be implenmented so something like this never happens again. By doing this, it will soon stabilize the market.  There was a securities and exchange commision created to enforce market rules and moniter any violations. With more reforms and acts added there was a gradual but slow improvement in the market. This was not the case however as another huge stock market crash appeared in 1932. The stock market proved to be the main cause of the Depression as problems with the Stock market simply would not go away.

During the Great depression the country was facing other problems such as the farming crisis which is unrelated. The farming crisis did have an impact on the country, but did it have a bigger impact then the crash? The answer is flat out no because of how many more people the crash affected. The farming crisis wiped out banks and farmers, while the crash wiped out a heavier majority of the country. The crash effected bussiness owners, employees, stockbrokers, busineses, banks all around the country. The stock market crash impacted the country as a whole which is why its the main cause of the Depression.

The Stock Market Crash of 1929 will live a day in infamy as people will never forget the panic this day caused across the country.


Citations

Amadeo, Kimberly. “Worst Stock Market Crash in U.S. History.” The Balance, The Balance, www.thebalance.com/stock-market-crash-of-1929-causes-effects-and-facts-3305891.

Stock Market Crash of 1929 Causes, Effects and Timeline.” Stock System, www.stockpickssystem.com/1929-stock-market-crash/.