What Was the Cause of the Great Depression?
What Was the Exact Cause Of The Great Depression?
The United States Great Depression leads many people to believe different stories about what actually caused it. The Stock Market Crash in October of 1929 is often referred to as the beginning of the Great Depression, but did it actually cause it? The answer is that it was the spark that lit the flame of the Great Depression.
The Great depression was a financial decline that started in 1929 and lasted through most of the 1930s. Its pinpoint was in North America and Europe, but plagued countries around the world (especially developed countries). Unemployment and homelessness sky rocketed and construction practically stopped in many countries. Industrial production declined by 50%, international trade plummeted 30%, and investment plunged 98%. The Great Depression was more severe and lengthy in the United States than in other developed countries. The unemployment rate rose higher and remained higher longer than in any other western country. As it expanded, the depression, for many Americans, was a hard time. (Garraty 3, Nardo 29-31)
By the fall of 1929 most Americans had reached the peak of success, wealth and happiness. Just a year before, President Hoover predicted that the day when poverty in the United States would be totally eliminated was slowly but surely arriving. James Horan refers to the era as, “a time of plenty”. This was because the country was at the height of a great industrial development which begun after the end of the Civil War. Mass production was in “high gear”. The middle class was very satisfied after receiving a large amount of goods. “It was a lavish era of silk shirts and two-car garages.”(Nardo 29)
The stock market was very successful; there were plenty of new stockholders who were apparently making profits- on paper. In the 1920s, in the U.S. many people began using credit cards to purchase automobiles and furniture. This increased the spending but created debt for the shoppers.
The United States Great Depression leads many people to believe different stories about what actually caused it. The Stock Market Crash in October of 1929 is often referred to as the beginning of the Great Depression, but did it actually cause it? The answer is that it was the spark that lit the flame of the Great Depression.
The Great depression was a financial decline that started in 1929 and lasted through most of the 1930s. Its pinpoint was in North America and Europe, but plagued countries around the world (especially developed countries). Unemployment and homelessness sky rocketed and construction practically stopped in many countries. Industrial production declined by 50%, international trade plummeted 30%, and investment plunged 98%. The Great Depression was more severe and lengthy in the United States than in other developed countries. The unemployment rate rose higher and remained higher longer than in any other western country. As it expanded, the depression, for many Americans, was a hard time. (Garraty 3, Nardo 29-31)
By the fall of 1929 most Americans had reached the peak of success, wealth and happiness. Just a year before, President Hoover predicted that the day when poverty in the United States would be totally eliminated was slowly but surely arriving. James Horan refers to the era as, “a time of plenty”. This was because the country was at the height of a great industrial development which begun after the end of the Civil War. Mass production was in “high gear”. The middle class was very satisfied after receiving a large amount of goods. “It was a lavish era of silk shirts and two-car garages.”(Nardo 29)
The stock market was very successful; there were plenty of new stockholders who were apparently making profits- on paper. In the 1920s, in the U.S. many people began using credit cards to purchase automobiles and furniture. This increased the spending but created debt for the shoppers.
Cited: Dudley, William. The Great Depression: Opposing Viewpoints. San Diego: Greenhaven Press, Inc., 1994. Garraty, John A. The Great Depression. San Diego. Harcourt Brace Jovanovich, 1986. Nardo, Don. The Great Depression. San Diego: Greenhaven Press, Inc., 2000. Problems of the Great Depression. [Online] Available http://www.bergen.org/AAST/projects/depression/problems.html, November 25, 2006. Stock Market Crash of 1929. [Online] Available http://www.stock-market-crash.net/1929.htm, October 9, 2006.