Causes Of The Great Depression Essay - 3200 Words

Between the late 1890’s, after the panic of 1893, and the late 1920’s, the American people led good lives in which most prospered. In the 1920’s the problems that led to the Great Depression were dispersed over a time of maldistribution of wealth, and what was called a bull market. A bull market is a stock market that is based on speculation. Speculation was a system of borrowing money to buy stocks and selling for a profit. Speculation only worked if the stock market was on the rise though. To this day people who have not been properly educated about the Great Depression believe that President Hoover was the cause. The idea that President Herbert Hoover caused the Depression could have arisen from the fact that he was the President at the†¦show more content†¦The national income rose from $74.3 billion to $89 billion (Gusmorino, Main Causes of the Great Depression). The whole American population did not live through the benefits of the â€Å"Coolidge P rosperity.† For example McElvaine, in his research on the Great Depression, stated, â€Å"in 1929 the top 0.1% of the population had an income equivalent to the bottom 42% of the population,† (McElvaine, Causes of Depression). That same top 0.1% of the population in 1929 had 34% of all the savings, while 80% of the population had no savings at all. A good example of this maldistribution of wealth can be seen with Henry Ford. In 1929, Ford reported an income of fourteen million dollars, while the average income of the American people was seven hundred and fifty dollars annually (McElvaine, Causes of Depression). If one were to calculate these numbers by present daily standards, with the average income at eighteen thousand dollars, Henry Ford would be making an astonishing three hundred and forty five million dollars. However, one should be reminded that Ford was not the only man in America making this amount of money, there were many people just like Ford around the Nati on. Comparing the 1920’s to today, one could say that such businessmen are like the Internet CEO’s today. With such a growing gap in the income of the people, it was without surprise that such a catastrophic event could occur. The FederalShow MoreRelatedCauses Of The Great Depression1319 Words   |  6 Pageshaving classic satisfying life concluded when the Great Depression ushered in the negative trend that would impact the U.S. economy in 1929. Therefore, what happened? In this essay, we will discuss what the Great Depression was for the Americans, the causes of the Great Depression, and the U.S.’s recovery from the Great Depression. The Great Depression One of the terrifying times in the U.S. history is the Great Depression. The Great Depression is an economic phenomenon, which according to theRead MoreGreat Depression and Its Causes1256 Words   |  6 PagesThe causes of the Great Depression of the 1920s and 1930s has been argued about for generations. Most people agree on several key topics and that it was the severity and length of time the Depression lasted that was actually the most remarkable. Hoover made many noteworthy attempts to try and solve this crisis, yet in the end it was President Roosevelt and his New Deal, that brought many Americans hope for the future. The first factor in the start of the Depression was the lack of diversityRead MoreCauses of the Great Depression2012 Words   |  9 Pages The causes of the Great Depression in the early 20th century is a matter of active debate between economists. Although the popular belief is that the main cause was the crashing Stock Market in 1929 caused the Great Depression, There were other major economic events that contributed just as much as the crash, such as American’s overextension of credit, an unequal distribution of wealth, over production of goods, and a severe drop in business revenue. As these events transpired the state of economicRead More Causes of the Great Depression Essay1143 Words   |  5 PagesCauses of the Great Depression Throughout the 1920’s, new industries and new methods of production led to prosperity in America. America was able to use its great supply of raw materials to produce steel, chemicals, glass, and machinery that became the foundation of an enormous boom in consumer goods (Samuelson, 2). Many US citizens invested on the stock market, speculating to make a quick profit. This great prosperity ended in October 1929. People began to fear that the boom was going toRead MoreCauses of the Great Depression Essay1108 Words   |  5 PagesThe United States has experienced recessions about every twenty years (give or take) since the beginning of the Industrial Revolution. Nothing that had happened before was quite this serious, chaotic, or as long lasting as the Great Depression. The crash was felt far beyond those on the trading floors. Speculators who borrowed money from the banks to buy their stocks could not repay the loans because they could not sell stocks, because no one else would buy them. This caused many banks to fail,Read MoreCauses of The Great Depression Essay701 Words   |  3 Pages Imagine a society where over 25% of the population was unemployed. That is what it reached during The Great Depression (â€Å"The Great Depression†). During the depression unemployment rates were the highest they have ever been. It is highly speculated to this day on what exactly caused The Great Depression. Most historians agree it was a chain of events, one after another, that brought our country into chaos. Some events were more impactful than others. These events caused pandemonium amongRead MoreEssay on The Causes of the Great Depression697 Words   |  3 PagesThe Causes of The Great Depression History Imagine waking up one morning, only to find out that all your investments and savings are gone. So if your bank that you invested all your money in collapsed, you didn’t get any money back. This is what happened to millions of Americans during the 1930s. This era was called the great depression. The great depression was one of the worst economy issues we have ever had in history. It was a hard time for everyone. The great depression started in 1929Read More The Cause of the Great Depression Essay552 Words   |  3 PagesThe Cause of the Great Depression The economic expansion of the 1920’s, with its increased production of goods and high profits, culminated in immense consumer speculation that collapsed with disastrous results in 1929 causing America’s Great Depression. There were a number or contributing factors to the depression, with the largest and most important one being a general loss of confidence in the American economy. The reason it escalated was a general misunderstanding of recessions byRead MoreCauses Of The Great Depression And The Great Recession2292 Words   |  10 Pages1. Examine the causes of the Great Depression of the 1930s and consider what similarities and differences can be drawn with the problems from the financial and economic crisis which began in 2008. Introduction 2007-2009 in America has often been described as the worst economic crisis since the Great Depression in 1929. There was lots of debate whether the economy was slipping back to double dip recession but there is considerable evidence that the economic crisis in 2008 is worse than the crisisRead MoreCauses of the Great Depression Essay651 Words   |  3 PagesIn 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 â€Å"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