During autumn of 1929 the stock market began behaving highly volatile. Stock market prices were expanded to just about breaking point, and then suddenly it crashed. Because of the Stock Market Crash the gross national product dropped 40 %, $6.1 billion in 1929 to $3.5 billion in 1933 (The Canadian History Page). The Bank had no money left because of the effect of the stock market crash. Wages in the industrial sector were not keeping up with huge increase in manufacture and profits.
Known also as Black Tuesday, October 29th left stockholders shattered with recorded losses reaching $40 billion dollars (Kelly, n.d.). Many banks and financial institutions began collapsing which led to irretrievable, uninsured deposits and savings. Fearing further loss, people began spending less which led to a decrease in production and an increase in unemployment. As companies began to fail, the government devised the Smoot-Hawley Tariff in order to protect American businesses. The Tariff placed high taxes on imports leading to a decline in international trade.
Could all these things have come together to cause one of the greatest depression that America had felt? Many citizens revolted against their elected leaders and large discontent rose in America during this time period. New political factions rose in the era. Could this have been the birth of the progressive movement? The depression of the 1890’s ruined banks, farms, and many of the train leaders were declaring bankruptcy during this time period.
Unfortunately, it did. On October 29, 1929, the stock market crashed, and the United States once again found itself in economic turmoil. Prior to this, many people had begun purchasing stock on margin, or in other words, on credit. When the market crashed, the stock brokers called the loans they gave out back so that their companies may survive, except the loans couldn’t be paid back by the debtors. Many of the nation’s banks soon went under because they too had paid into the stock market and had lost much of their money.
They are called “industrial statesmen” for the great economic power they helped America become. At the same time, they are regarded as “robber barons” because they built their great wealth by abusing the system, abusing employees, and destroying their competitors to satisfy their own needs. They grew America, but brought down many on their path. Document F is concentrated on John D. Rockefeller. A great man, really, in charge of having possibly the biggest oil refinery company in the world.
IV. An assessment of the impact of the recent economic/financial crisis on Canada’s trade The great recession that plagued the world in 2007 stemmed from outstanding issues in prior years: the housing slump in the United States, numerous defaults on subprime mortgages, and significant investments in asset backed securities. These issues became more prevalent and developed into a mass liquidity crisis in the United States. The ‘liquidity crisis’ adversely affected financial institutions ability to raise capital and consequently lead to the collapse of Lehman Brothers, one of the world’s largest investment banks, on September 15, 2008. Lehman’s bankruptcy caused various banks worldwide to falter as liquidity issues spread across international
The 1920′s could be described as economic boom gone bust. The early 1900′s began with an advancing industrial revolution and ended with the Stock Market Crash of 1929, which is one reason it is known as an era of contrast. The trigger that caused the great depression began with the boom in sales of stocks in a bull market. Credit was developed and debt was created. Stock prices hit rock bottom and wild selling left banks with little in reserves to stabilize.
Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and American truly entered what is called the Great Depression. Before Black Tuesday, the economy had been stagnant for months prior, and the effects of the market crash were compounded due to the use of margin, and the general lack of market regulations at that time. The use of margin means people had borrowed funds (Doc K). This led to a spiral of falling prices. With significantly reduced wealth, spending decline, banks failed and on top of this drought conditions contributed to a lack of good crops.
The Great Depression was one of the hardest times that the American economy has gone through. The Great Depression began with the Wall Street Crash of October, 1929 and quickly spread throughout the world. The stock market crash marked the beginning of a many years of high unemployment, low profits, horrific farm incomes, lost opportunities for economic growth, and insufficiency of money. Reasons of the Great Depression include numerous things, especially high consumer debt, badly controlled markets that permitted loans that were given out to frivolously by banks and investors, the lack of high-growth new industries, all working together to create a downward economic spiral of reduced spending and lowered production (Rosenberg, Jennifer).
Isaac Bernstein Mr. Cooper US History 12 March 2013 What Caused the Great Depression? The Great Depression, which lasted from 1929 to 1940, was caused by over-production and Americans gambling with their stocks. The environment from the twenties drastically changed from being a “roaring” time period, to the thirties, which were filled with depression. America went from spending money, going to baseball games, and buying fancy clothes, to unemployment, severe debt, and living off food stamps. What happened to America?