What Are The Effects Of The Great Depression Essay
Throughout history, disasters have always happened. There have been natural catastrophes and man-made fiascos, among others. The Great Depression was a financial woe that affected everyone; rich to poor. Many events contributed to this debacle. There was a false sense of prosperity, a global crisis, and investors spending wildly. Eventually, all of this led up to the stock market crash of 1929. Banks failed, and people stopped spending in the fear that they would lose all of their money. Since no one was buying products, companies failed, jobs were cut, and people slowly lost everything. The 1920s marked a time when America was too dependent on production. There was a misleading sense of prosperity, and that would soon lead to America’s downfall.
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While America prospered during the 1920s, most of Europe, still feeling the effects of World War I, fell into economic decline. America became the world’s banker, and as Europe started defaulting on loans and buying less American products, the Great Depression spread.
With only loose stock market regulations in place before the Great Depression, investors were able spend wildly, buying stocks on margin, needing only one tenth of the price of a stock to be able to complete a purchase. The vigorous spending led to falsely high stock prices, and when the stock market began to tumble, investors couldn’t make their margin calls, and a large sell-off began. While the rise in the stock market (from 181 points in early 1928 to 381 points in September 1929) was fueled by false hope, the plunge was flamed by fear.
All of this led up to the stock market crash of 1929. Many believe that the stock market crash that occurred on Black Tuesday, October 29, 1929 led to the Great Depression. Two months after the original crash in October, stockholders had lost more than 40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough, and America truly entered what is called the Great
While America prospered during the 1920s, most of Europe, still feeling the effects of World War I, fell into economic decline. America became the world’s banker, and as Europe started defaulting on loans and buying less American products, the Great Depression spread.
With only loose stock market regulations in place before the Great Depression, investors were able spend wildly, buying stocks on margin, needing only one tenth of the price of a stock to be able to complete a purchase. The vigorous spending led to falsely high stock prices, and when the stock market began to tumble, investors couldn’t make their margin calls, and a large sell-off began. While the rise in the stock market (from 181 points in early 1928 to 381 points in September 1929) was fueled by false hope, the plunge was flamed by fear.
All of this led up to the stock market crash of 1929. Many believe that the stock market crash that occurred on Black Tuesday, October 29, 1929 led to the Great Depression. Two months after the original crash in October, stockholders had lost more than 40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough, and America truly entered what is called the Great