How Did The Stock Market Crisis Contribute To The Great Depression?

The Great Depression is by far one of the largest financial disasters the world has seen. Hundreds of people lost their homes, their businesses, their savings, their hopes and dreams. Families had to learn to adapt to these desperate times, and a large quantity of people turned to welfare. For ten years government's struggled with a crisis of unheard-of proportions. Understanding the reasons behind the Great Depression- in particular regards to how the Stock Market Crash greatly affected and commenced it- is vital to preventing any future economic depressions. This research paper will be explaining how the Stock Market crash contributed to the Great Depression, by causing bank failures, limiting consumerism, leaving Canadians drowning in debt
This approach was successful, but only as long as stock prices kept rising. Many people invested huge amounts of money-even money they didn't have. In fact, "ninety percent of the purchase price of the stock was being made with borrowed money."(Bos 2014). This was a risk because the stock prices were at a far larger value than the companies earnings and profit, however people were treating this as a main form of income. Eventually the stock market crashed, it was noted that stock values had dropped ninety percent (Ganzel, "Crash!" 2003). Consequentially, caused bank closures nationwide. These bank failures threatened the economy when people began losing their savings. Many banks invested in large portions of their clients' savings in the stock market ("The Economic Causes" 2012). Due to this, banks began to fail at shocking speeds. Uninsured bank deposits and bank failures resulted in millions of people losing savings (Ganzel, "Bank Failures" 2013). Even those who didn't lose savings stopped depending on banks out of fear that they would lose their earnings just as others did. Nonetheless, this decision caused even more banks to
Farmers who prospered at the rising wheat prices, were hit the hardest. Many farmers even used their corn crops as an alternative fuel source because the price of corn was lower than coal at that time (Ganzel, "Burning Corn for Fuel" 2003). Unemployment rates rose at climactic rates in the 1930's, reaching "an average of thirty-two per cent in Canadian cities. In Windsor, Ont., it reached fifty per cent. In the Maritime provinces, unemployment for many labourers hit sixty per cent." ("The Great Depression hit Canada" 2013). Unemployed men felt like disappointments as a result of their inability to provide for their families, however, in an attempt the maintain their pride they avoided applying for relief. They often stayed at home, frustrating their wives. Men were emotionally distant from their children, and, while some drank their problems away, others left their homes in search of employment in other cities. Some abandoned their wives and families completely (Bryson 2004). Women and children's involvement also contributed to the family disorganization. Often married women took on low-status, low-paying jobs just to provide the family with another source of income. Children each contributed in their own way, whether it be girls doing domestic work or boys working on a part-time basis (Bryson