Thursday, May 21, 2020

The Great Depression Was Caused By The Stock Market Crash

The Great Depression was the deepest and longest-lasting economic downturn in the history of the Western industrialized world. Many people believe that the great depression was caused by the stock market crash, this is not the case. The stock market crash revealed the structural flaws in the economy, but it did not cause the depression; it was merely one of its many symptoms. A healthy economy can recover from such a contraction. There were several other factors that contributed to the onset of the Depression Government policies throughout the twenties e.g. high tariffs, which discouraged foreign trade, lax enforcement of anti-trust laws, an absence of checks on speculation in real estate and the stock market, and adherence to the gold†¦show more content†¦For the U.S., people began to realize they were in a depression after several events. The first being the stock market crash, because their saving began to drop or disappeared completely with the closing banks, as a result defaults and bankruptcies fed deflation. For those who were still in the mindset of this won’t happen to me and ignoring what was right in front of their faces, the nation’s money shrunk by a third, which in turn, drove prices and production down, they began to open their eyes when their wages and hour were cut. It was the most catastrophic economic event in U.S. history. Those who were able to keep their jobs noticed a significant decrease in their hours and wages. The contraction of the economy squeezed debtor, especially farmers and laborers who made installment purchases or mortgages. By 1933, thousands of Americans lost their homes to foreclosures. Factories shut down, banks closed, farms went bankrupt, millions of people found themselves jobless, but homeless and destitute as well. Those who were desperate for food rummaged through trash cans behind restaurants. There were those who took up shelters in in vacant lots or slept on park benches and in alleys. Hobos and tramps snuck on empty railway cars going from town to town searching for jobs. During the winter to keep warm they would cover themselves with newspaper. For those who

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