The event that started the Great Depression was “Black Tuesday.” On this day, the stock market crashed. The so called “bubble” had burst. The roaring twenties were over. Banks were forced to close, as they had no more money for the massive amount of people that were making withdrawals. Many lost their jobs, and were forced to look for work elsewhere.
What Caused the Great Depression? Many believe that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. Actually, the stock market crash was only one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars (Doc D). 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.
About a month later, the Great Depression took action on the stock market and would cause it to crash and put America and other countries around the world into a huge crisis. Hoover would attempt to fix the economy but would never be able to.
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.
Only Soviet Russia, the country which had basically isolated its self from every other country at the time, had not been affected by the Great Depression. But the Russian people, especially in the Ukraine, had suffered very badly for several years after 1929 for other reasons and causes. Another effect of the Great Depression was the shrinkage in trade and manufacturing. It shrank rapidly, for example, in 1929 the estimated value of United States imports and exports had gotten up to ten billion dollars. By 1933 the value had dropped to three billion.
FOLLOW THE LEADER ADOLF HITLER Germany in 1930 In 1930 the Germanic social and economic situation was heading towards chaos. After the Wall Street Crash of 1929, the United States were forced to call back the money they had loaned Germany in 1924 and 1929, leaving the Weimar Republic with no resources to invest in the economy. The Germanic growth over the last years had been an illusion, as a great deal of the capital invested had been coming from overseas loans. As the money borrowed was paid back, Germany was once again facing bankruptcy. Unemployment, which was not a major issue in 1929, dramatically soared by September 1930 1.
Joseph Canlas Bergen Catholic AP U.S. History September 26, 2011 The Impact of the Great Depression on Social Groups A decade following the end of World War II, tragedy befell the United States. With the transition from war to a time of peace, factories previously dedicated to the production of warfare supplies (i.e. ammo, artillery, clothing, vehicles) were forced to either shutdown or change their produce. Large amounts of money were used in the demobilization of soldiers and these incoming soldiers were in great need for re-entry into the work force. The size of the army was decreasing at the expense of the labor market, which struck its peak at 1.6 million people.
When people realized this, they quickly got rid of their stocks. This caused the prices of stock to drop drastically, and continue to drop. This completely ruined the economy, and was a main cause for the stock market crashing, and the Great Depression. Through the United States’ tariff policies, the American way of spending money, and by the gambling of stocks, the Great Depression began. Each economic failure led to the next, and ended up destroying America’s economy.
Stock Market Crash of 1929 caused bank failures all over the United States. Throughout the 1930’s over nine thousand banks failed. Beginning in October 1930 and lasting until December 1930, the first of a series of banking panics now accompanied the downward spasms of the business cycle (Rosenberg, Jennifer). Although bank failures had occurred throughout the 1920s, the magnitude of the failures that occurred in the early 1930s was of a different order all together.The absence of any type of deposit insurance resulted in the contagion of the panics being spread to sound financial institutions and not just those on the margin. Bank deposits were uninsured and because of that people lost their savings.
The Great Depression (1929-39) was the most profound and longest-enduring financial downturn in the historical backdrop of the Western industrialized world. In the United States, the Great Depression started not long after the share trading system accident of October 1929, which sent Wall Street into a frenzy and wiped out a huge number of speculators. Throughout the following quite a while, purchaser spending and venture dropped, bringing about steep decreases in modern yield and rising levels of unemployment as coming up short organizations laid off laborers. By 1933, when the Great Depression came to its nadir, exactly 13 to 15 million Americans were unemployed and about portion of the nation's banks had fizzled. Genuine yield and costs fell continusely.