Article Categories

»	Arts & Entertainment
»	Automotive
»	Business
»	Careers & Jobs
»	Education & Reference
»	Finance
»	Food & Drink
»	Health & Fitness
»	Home & Family
»	Internet & Online Businesses
»	Miscellaneous
»	Self Improvement
»	Shopping
»	Society & News
»	Sports & Recreation
»	Technology
»	Travel & Leisure
»	Writing & Speaking

Reprint Article Code

Category: Articles » Finance » Stock Market » Article » Article Code

Causes of the Great Depression and the Stock Market Crash

The Great Depression was the longest and worst economic collapse in the history of the modern industrial world, which was initiated primarily by the stock market crash of 1929. During 1920's, the United States experienced and outstanding period of prosperity. However, the economy began to decline in 1928 when production, sale of goods, and employment decreased drastically. On October 24, 1929, hailed as Black Thursday, the stock market crashed, triggering the Great Depression. The stock market crash did not actually cause the Great Depression, but rather contributed to the disaster of the Great Depression, which was ... read more

Article Title:

Article Body:

The <a href="http://www.stockdepression.com">Great Depression</a> was the longest and worst economic collapse in the history of the modern industrial world, which was initiated primarily by the stock market crash of 1929. During 1920's, the United States experienced and outstanding period of prosperity. However, the economy began to decline in 1928 when production, sale of goods, and employment decreased drastically.

On October 24, 1929, hailed as Black Thursday, the stock market crashed, triggering the Great Depression. The stock market crash did not actually cause the Great Depression, but rather contributed to the disaster of the Great Depression, which was caused by a number of serious economic problems.

Although the "Roaring Twenties" appeared to be a prosperous time, income was very unevenly distributed. Businesses prospered tremendously, but the workers received a relatively small share of the wealth produced. At the same time, taxes were lowered for the upper class. As a result of these trends, the top .1 percent of American families had an income equal to that of the bottom 42 percent. World War I also weakened the economy.

After World War I, the United States served as the world's banker and primary creditor as Europe struggled to pay war debts. Bankers lent too heavily to borrowers in Europe and made the international banking structure extremely unstable by the late 1920s.

Farmers were already in a depression in the 1920s from World War I. Farmers expanded their output during the war when demand was high, but after the war they found themselves competing in an over-supplied international market. Prices fell and farmers were unable to make a profit. The stock market crash of 1929 specifically had an impact on the Great Depression. Speculation in the 1920s caused many people to invest in stocks with loaned money (credit) and used these stocks as insurance for buying more stocks. But in the later 1920s, stock investment began to decline due to lack of confidence. In late October, prices began to drop rapidly and investors became fearful and began selling stocks.

On Black Thursday, October 24, 1929, the stock market crashed and major corporations suffered huge losses. Thousands of banks were unable to stay open since investors were unable to pay back the loans they took in the 1920s. In 1932 and 1933, stocks hit rock bottom, about eighty percent lower than they had been in their highs in the late 1920s.

The demand for goods declined because people didn't have any confidence in the economy and felt poor. 
 
These trends caused America's economy to sink into the worst depression it had ever seen. 
 
The stock market crash inhibited the ability of the economy to recover from the underlying problems that affected the economy including unevenly distributed wealth, agricultural depression, and banking problems.

Interested in this subject? Try this link for <a href="http://www.stockdepression.com">more of the same</a>

Author Bio:

Some other recently published stock market articles

Be A Rebel: Contrarian Investing by Christopher Smith
Buying stock on a hunch that it may go up when all indicators are that the particular stock of interest is destined for a down turn is known as contrarian trading. While this particular type of ...

Advantages of Online OTCBB Stock Trading by Praveen Ortec
Over the years all Over-The-Counter Bulletin Board (OTCBB) stocks are traded either directly or by call in. Both processes take ...

Online share trading can be a liberating experience by Martin McAllister
The old world of stock-broking is changing rapidly: the practice of dealing in stocks and shares, for instance, is no longer purely the realm of high-flying financial executives, as greater numbers of ordinary ...

The Bulls And Bears Game: Risks And Survival Strategies In Investments by Wain Roy
The stock market is never constant, but one thing that is constant in the bulls and bears game is this question in people's minds as to how to make money with investments. Price ...

How Do You React When Your Stocks Are Down by Christopher Smith
How do you react when you've found yourself in a losing position? Do you stick your head in the sand and hope ...

What You Don't Know About Micro Cap Stocks by Christopher Smith
Most investors think of the major stock exchanges when trading stocks comes to mind. The New York Stock Exchange (NYSE), the National Association of Securities Dealers ...

Publisher Guidelines

You may reprint this article electronically in your newsletter or on your website, free of charge.

If you reprint this article from our site, then you must keep everything intact. This includes the articles title, author name, articles body, authors bio / resource box, the links contained within the article, all copyright notices and the link pointing back to our site. All links within the article must also be made active / hyperlinks.