Despite caution of the dangers of speculation, many believed that the market could sustain high price levels. Before the crash, economist Irving Fisher famously proclaimed, ‘’Stock prices have reached what looks like a permanently high plateau.’’ The optimism and financial gains of the great bull market where shattered on ‘’Black Thursday’’, October 24, 1929, when share prices on the New York Stock Exchange (NYSE) collapsed. Stock prices plummeted on that day, and continued to fall at an unprecedented rate for a full month. The 1929, crash came during a period of declining real estate values in the United States (which came up a round 1925) near the beginning of a chain of events that led to the Great Depression, a period of economic decline in the industrialized nations. After a six year run the world saw an Industrial Average increase in value fivefold, prices peaked at 381.17 on September 3, 1929.
Some of the hardships that the Americans faced were unbearable. However, there was light at the end of the tunnel, for the government did have ways to help them out of the Great Depression. Throughout the long and hard period in which the Great Depression lasted through, Americans faced many problems and hardships. First, the unemployment rate in the U.S. immediately skyrocketed after the Stock Market crash. (Doc.
‘We in America today are nearer to the final triumph over poverty than ever before in the history of any land.’ This was said by New republican president, Herbert Hoover, in 1928. However it was not true, for within a year, America had lost all confidence and it had fallen into the depths of depression. The Great Depression was an economic crisis which started with the crash of the Wall Street stock markets in 1929. It was a tragedy which affected all areas of American life. It caused unemployment rates to rise, reaching as high as 25%.
True, during the time of the war, and for about ten years post-war, the US economy soared to all time highs. But shortly after, when the costs of the war had kicked in and the debts came rolling in, what followed was the greatest depression America had ever faced. People lived in “Hoovervilles”, thirteen million people became unemployed, the income of an average American family decreased by 40%, there was more emigration than immigration, racial tensions ran high, etc. These are just some of the consequences of the Great Depression, part of which was caused by the debt of a war that America could have avoided, thus avoiding such a hard blow by the Depression. Had America stayed out of the war, the economy might have not been affected as seriously as it was by the Great
Monetary and Fiscal Policy actions will take some time to affect measurably other markets. A decline in the real Gross Domestic Product of 6.2 percent annually in quarter 4 of 2008, was reported by the Commerce Department. Most categories of final sale products contributed to the decline. Jobless trends of November and December continued in January wherein businesses trimmed 600,000 positions. Recent indicators display worsening conditions as mid January new unemployment claims have increased.
Great Depression The Great Depression was a global economic crisis that started in the early 1920s. This crisis leaded a depression around many nations and many young people. On October 29, 1929 there was a crash of the New York exchanges. The credit dropped rapidly after people kept on spending money, when they didn’t have any money. The stock market crashed rapidly, and took a big hit to the U.S. economy.
The stock market crash was involved in the causes of the Great Depression, because it was the trigger point of it all. “In the 1920s many people wanted to put their money into stocks, so prices got higher and higher” (Lunn, Moore 235) the stock markets were very high by 1929. Although there were some people who bought the stocks, “the stock market was fuelled by borrowed cash.” (Berton 29) in other words the stock market mainly made sales from people who could not afford the stock completely and when it crashed on October 29th, 1929 “the Montreal and Toronto stock exchanges also plunged downward; 16 companies alone lost $300 million of their value” (Bolotta, Hawkes 104) also causing investors who were buying on credit, to lose their homes, businesses, cars and many of their other belongings that they put on loan to buy their shares, leaving them homeless, jobless and if having a car for transportation was a necessity, then these investors and their families had nothing at all. Therefore the stock market crash was a very significant part for the cause of the Great
This is the start of the biggest national crisis since the civil war. The Great Depression had important consequences and was a devastating event in America, however many good policies and programs became available as a result of the great depression, some of which exist even today. The stock market was very popular in the 1920s, and was said to be an easy way to make money. When the stock market crashed all who has invested lost their money.
The Great Depression of the 1930s was the longest economic disaster of the United States. Possibly the greatest crisis faced by any other country. This was a very long period were a lot of people where affected by the economy, unemployment, and World War II. The Great Depression led to the biggest economic downfall in United States history. Unemployment increase 25%, Bank Failures, and the industry were ruined but the two major causes of the Great Depression were the Stock Market Crash of 1929 that in just four days dropped 40% and gave the country their economy status for the next decade and the difficult financial situation caused by World War I when Europe also was having an economy issue and couldn't pay a debt to the United States.