Essay about Causes of the Stock Market Crash of 1929

There are primarily two theories as to why the stock market crashed in 1929, affecting innumerable people in the United States and around the world. One speculation to how the devastating catastrophe transpired is driven by the idea that there was an over-production of goods and services and an underconsumption by the people, creating a plummeting bubble; consumers held on to their money and stopped investing, hoping that the market would stabilize. Another common conjecture is the belief that the Great Depression was provoked simply by normal recession, within the business cycle, and was brought about by poor policy on the behalf of the Federal Reserve. Many believe the crash was frankly unavoidable because of the unprecedented combination

A main factor in this was the relative prosperity that the upper class enjoyed during their presidencies; because the rich were doing so well, the government was compelled to help continue their success. This pro-business rhetoric was illustrated in the inaugural address of Warren G. Harding, who promised to reduce government intervention in business (Document E). Harding’s stance was based on the industrial productivity that had been spurred by America’s participation in World War I, as well as his view that big business could pull America out of the postwar slump. Harding’s Vice President and successor Calvin Coolidge continued the federal commitment to businesses and the wealthy, arguing that individuals deserved control over their wealth because it was a product of their work (Document D). He also believed that big business was

The stock market crash of 1929, additionally called the Great Crash, was a sharp decrease in U.S. stock exchange values in 1929 that added to the Great Depression of the 1930s. The market accident was a consequence of various economic imbalances and structural failings (Pettinger). In the 1920s, there was a fast development in bank credit and advances. Energized by the quality of the economy, individuals felt the share

The Great Depression originated in the United States with the stock market crash on October 29, 1929. The depression was the biggest economic fall in American’s history. This crash stretched throughout the globe and affected the rich as well as the poor. There were many causes that assisted in bringing the depression into existence. However one of the main causes was the disproportionate riches during the nineteen-twenties. The gap between the rich and the working class people was the enlarged industrialize production during this period. Also in this period production cost fell quickly, wages rose slowly and prices remained steady.

The Great Depression of the 1930’s was caused by many problems. They include overproduction, monetary policy, war debt, tariffs, the stock market crash, and unequal distribution of wealth. These each play a specific and intricate role in bringing the U.S economy to its knees.

This paper will present a brief summary and discussion of the causes of the Great Depression based on Frank Stricker 's paper, "Causes of the Great Depression: or What Reagan doesn 't know about the 1920s." Stricker presents an argument as to what he believes to be the root causes of the Great Depression as they relate to the decade preceding the stock market crash of 1929. This review is intended for undergraduate and graduate students of U.S. American History. Stricker present 's several essential points in his paper. The capitalist form of economy, by its nature, has an insatiable appetite for ever-increasing profits. During the 1920 's profits were high, yet income distribution was unequal (95). The only real benefactors were

many production lines fail around the country, furthering the depression. "Manufacturing fell byhalf, with the production of automobiles dropping 75 percent" (Byas). It was so bad that only

After 1927, consumer spending declined and housing construction slowed. Inventories piled up, and in1928 and 1929 manufacturers began to cut back on production and lay off workers. Reduced income and buying power in turn reinforced the downturn. By the summer of 1929 the economy was clearly in a recession. Although the stock market crash and its immediate consequences contributed to the Great Depression, longstanding weakness in the American economy accounted for its length and severity. Agriculture, in particular, had never recovered from the recession of 1920-1921. Farmers faced high fixed costs for equipment and mortgages incurred during the high inflationary war years. At the same time prices fell because of overproduction, forcing farmers to default on mortgage payments and risk foreclosure. Because farmers accounted for about one-forth of the nations gainfully employed workers in 1929, their difficulties weakened the general economic structure. Other industries also had experienced economic setbacks during the prosperous 1920s. The older industries such as textiles, mining, lumbering, and shipping faltered, newer and more successful consumer- based industries, such as chemicals, appliances, and food processing, proved not yet strong enough to lead the way to recovery.

There are many reasons for the stock market crash of 1929. First, it is important to understand what a good stock market looks like before the crash. The U.S. was exporting many goods to Europe to help them rebuild after the long, torturous WWI. The battle’s occurred on European soil, so they experience massive destruction throughout the land. This trading between the U.S. and Europe really helped the U.S.’s economy

Don Nardo, a renowned writer and historian, has written many books about American history. He is also the book editor of this publication. This book is compiled with various essays written by scholars regarding the Great Depression. Each essay relates to the next, and the book as a whole therefore aims to inform the reader of This source is valuable because it includes many accounts and viewpoints of several individuals, therefore the reader can see where the writer of the essay is basing their opinions on. One limitation is that since there are so many different viewpoints presented in this book, it may confuse the reader when it comes to searching for a definite answer.

In the 1920s, American economy had a great time. The vast majority of Americans in 1929 foresaw a continuation of the dizzying economic growth that had taken place in most of the decade. However, the prices of stock crested in early September of 1929. The price of stock fell gradually during most of September and early October. On “Black Tuesday” 29 October 1929, the stock market fell by forty points. After that, a historically great and long economic depression started and lasted until the start of the Second World War. The three causes of the Great Depression are installment buying, uneven distribution of wealth and the irrational behavior in the stock market.

Many people speculate that the stock market crash of 1929 was the main cause of The Great Depression. In fact, The Great Depression was caused by a series of factors, and the effects of the depression were felt for many years after the stock market crash of 1929. By looking at the stock market crash of 1929, bank failures, reduction of purchasing, American economic policy with Europe, and drought conditions, it becomes apparent that The Great Depression was caused by more than just the stock market crash. The effects were detrimental beyond the financial crisis experienced during this time period.

The stock market crash of 1929 was one of the worst time periods in American history for all families from every race. Reasons the stock market crash in 1929 was due to a failure in banks, to many bad investments and many Americans who panic. The aftermath of the stock market crash Relief and reform measures enacted by the administration of President Franklin D. Roosevelt (1882-1945) helped lessen the worst effects of the Great Depression; however, the U.S. economy would not fully turn around until after 1939, when World War II (1939-45) revitalized American industry. Reasons the stock market crash led to the great depression was prices kept dropping and led to half of America’s banks failing. The stock market crash of 1929 was one of the worst times in American history for all families from every race.

In the late 1920’s and early 1930’s many companies would overproduce products. For example in 1930 the Ford factory in Windsor would produce 400,000 cars even though the most cars they would sell in one year in the 1920’s was 260,000. Considering this, due to the overproduction of manufactured goods, the golden rule of business was broken as supply was higher than demand. This would create an imbalance between supply and demand. As a result companies would lower the price of their goods in order to rid themselves of excess products and lower production in order to increase the demand of their products. This created a system where companies would make little to no profit on sales and lay many people off in order to decrease production. Hence creating a boomerang effect where the economy, many individuals economic situation and business as a whole would suffer. Not to mention this likely could have been easily been avoided if the golden rule of business was followed and a balance remained between the supply and production of products and demand for these products in the 1930’s. To summarize overproduction in the 1920’s and 30’s would result in many people losing jobs and would weaken the economy, which resulted in the creation of the conditions that would result in the great

In 1929 America experienced one of the worst and the first crash of the stock market. This also lead to what we call the great depression, a time of no economic growth, and to make matters worse we also began to go through the dust bowl times. At that time the market had little to no implemented regulations. President Herbert Hoover at the time blamed the stock market crash on the lack of regulation. Today, the market has many more regulations than there were back then. Some people and presidents want less or more regulation on the market. So which is better? Regulation all the way! Regulation gives increased security, restored trust, political capital, and path dependency.