The great depression and the stock market
The Great Depression in the United States began in and ended in It was the worst economic crisis in the history of the U. The whole world was negatively impacted by the Great Depression. Below you will see the great depression factscauses and the great depression timeline. Things such as electricity, radio, telephone and cars were being produced for the masses. There was mass production in the manufacturing, telecommunications, movie and chemical sectors.
Infrastructure was being built to support all of these new technologies. Much of the population moved into the cities to acquire jobs in these industries.
Americans found themselves with ever increasing amounts of dollars to spend which was then invested in the stock market and deposited in to banks. With the supply of money growing rapidly, banks were opening up at the rate of 4 — 5 per day. The Great Depression happened due to a number of reasons. It was created by a combination of a stock market crash, bad banking structure and tight monetary policy. This is why it lasted so long. The stock market peaked on September 3, with a record close of Trading volume was k shares.
On Monday, October 29, on By that time, the markets closed at In that single day, investors lost 14 billion dollars and by the end of40 billion dollars was lost. This crash put a lot of pressure on banks and caused a great deal of money to be taken out of the economy.
What caused the Stock Market Crash of that preceded the Great Depression? | Investopedia
At that time, banks lent money to investors to buy stock. Banks were allowed to speculate and buy stocks for themselves. Because the capital requirements to start new banks were low, many banks were created during that time. Once the selling began, more selling was needed to satisfy margin calls and liquidity requirements for banks.
People feared that their bank would collapse since, at that time, there were no guarantees on cash at the bank. That started a massive run on the banks to pull money out.
What caused the Stock Market Crash of that preceded the Great Depression? | Investopedia
Some banks were not able to fulfill the requests for withdrawal and closed their doors to people. Lending for business and consumers was ground to a halt.
More panic followed as people lost their money and banks collapsed. People then rushed to withdraw their money and this created a domino effect.
At that time, paper money was backed by gold. People started putting money under their mattresses instead of risking putting it in the bank. Cycles of ups and downs in the economy are normal. Throughout our history, we have had many recessions. Bad monetary policy can turn a recession in to a major depression. The government began to increase interest rates, infrom 3. Some believe this is what caused the recession to come about in August of The government failed to act to stabilize or increase the money supply during The Great Depression.
Prices for goods were allowed to drop and banks were permitted to fail. This led to deflation. The government failed to restore confidence in the banking system. Their mission at the time was to maintain the gold standard.
That meant ensuring that there were sufficient gold reserves to meet the demands of the depositor, as well as ensuring that there was adequate demand for currency.
During the Great Depressionthe country was hit with an extremely large unemployment rate. Byover 13 million Americans had lost their jobs. Bynearly one-half of all residential loans were delinquent and over 1 million families lost their farms. In alone,families were evicted from their homes.
The Great Plain States were hit even harder than other states. This is because they were hit by a severe drought. Many companies were forced to close, due to the economic environment. Banks were closing at an alarming rate and in alone, more than 4, banks closed.
During the Great Depression, there were 2 million homeless people in the United States. The stock market hit a low in closing at It is interesting to note that one industry actually did very well during this period of time. It was the Hollywood film industry.
It is thought that people went to the movies because, for a brief time while at the movie, they could forget their many hardships. Comedies were big at this time and the Three Stooges provided a great deal of entertainment for many. The Wizard of Oz was released during this period in Poor Family During The Great Depression.
The role of the United States Government changed dramatically during the Great Depression. InCongress passes the Glass-Stegall Act which bans any connection between commercial banks and investment trade options in roth ira account. In Franklin Roosevelt takes office. He enacts his New Deal legislation. The Federal Deposit Insurance Corporation is created to insure all deposits at banks.
InCongress passes the Securities and Exchange Act. This helped to police put up baby adoption sims 3 related to the selling of securities.
The Trade Agreement Act was passed to help end the trade wars. Inthe Social Security Act was established to give assistance to the unemployed, handicapped and elderly. The Banking Act was passed to strengthen the Federal Reserve System.
A Minimum Wage Bill was passed in This included implementing a hour work week for workers of companies that participated in interstate commerce.
The demand this placed on the government created a need for a much larger government workforce. By the time the Depression ended, there were more thanpaid civil workers. The great depression and the stock market Had to Relocate to Find Jobs.
On December 7Japan attacked Pearl Harbor. The United States responded by borrowing over 1 billion dollars to build up its military. As a result, U. Inthe GDP had started to grow again and the unemployment rate was falling. Inthe unemployment rates were at A combination of government spending, prompted by World War II and monetary expansion is what ended the Great Depression. One can also conclude that this had some effect in ending the Great Depression.
Innovation helps to increase demand for goods and growth in productivity helps to increase the output of goods. In the aftermath of the Great Depression, a lot of things changed. There were 10, banks that went out of business. Around one-half of all banks either closed or merged with other banks. The role of the Federal Reserve and government increased. Tighter regulations were put on financial markets and banks.
The Federal Reserved shifted to a policy of maintaining high employment and fast growth. The United States emerged from World War II as a super-power and maintained its status as the largest economy ever since. I think in we were heading down that road though it will take another major event for us to start down that path again.
The world will suffer. But, American youth do not believe we could be on the threshold of a great depression. I have seen it coming since Ronald Regan started on the east coast breaking the unions, then, jobs became more competitive, wages dropped, benefits changed, Insurance Premiums started the great depression and the stock market rise, and we began importing more drugs to dope down America through Florida. Thanks to the stategies of the Iran Contra affair. Reminds me of the Great Depression.
Only on a bigger scale. To mention on city that has been on my mind and in my heart. Correct me if I am wrong, but, this is the pattern all over America in some cases small exoduses, and in the case of Detroit, this is big. Our country is in the intensive care ward as far as I am concerned. But, how do you feel that as a tax paying citezen, one who most likely takes pride in what you do, bailed out banks, those banks blessed their executive team with bonuses in the millions and we actually ended up borrowing money, using tax payers dollars to bail out the failing financial institutions.
That was the cost of doing business as a country that declared war on Iraq. Thank you for the sensible critique. Me and my neighbor were just preparing to do some research about this. We got a grab a book from our local library but I think I learned more from this post. I am very glad to see such great info being shared freely out there. An interesting article, yet not all the facts have been provided.
I wonder if there is any truth in the following statement. Well i have to write a page letter to my teacher though the eyes of people living through the great do cat breeders make money. I was born in Marchso I grew up during the depression.
Now that I look back on those days, the one thing that stands out in my mind is that we were all poor. Since we were all poor and had never known anything else, we did not know we books on learning how to trade stocks poor!
Mildred, you are probably a better person for having survived such hardship. You know the true meaning of community, unlike what passes for it today. I find a lot of opinion in this article, when it states that it is about facts. They went with one economist theory as to why the Federal Reserve was a part of the collapse.
Which is not fact, but again, theory….
The Great Depression Facts, Timeline, Causes, Pictures | Stock Picks System
Mildred, you bring up a great point. I would say that that sucked a lot more than the Great Depression. That is how your life might have been in the Great Depression. That is complete hogwash and written by a true lover of the Federal Reserve.
The Federal Reserve instigated the ENTIRE meltdown to give them more control over our currency. A little history about the Federal Reserve is that is not Federal, but a completely private bank, that controls and prints money out of thin air and controls the whole nations interest rates. Yes, they control it, not a free market, but a secretive bank that does not have to release their files to the public.
The Federal Reserve itself was derived and signed into legislation after the first depression, with the promise to prevent further depressions. Hmm tell that to the second depression…. The last thing I will say about this horrible un-American institution is that is was signed into power on December 23during Christmas recess, while most members were off with their families.
Passed under secrecy and without public rejection, because it only need a majority to pass. This establishment is the reason why our economy today is spending out of control, that will untimely lead to the greatest depression of them all. Hi I was wondering if I could use your photos for a school project, I would really appreciate it thank you!
Doing reseach on the great depression just having a little bit of problems finding the heros that are not from america. I was wondering if you could tell me anything about a homeless person during the Great Depression, I have to tell what life was like being homeless in the Great Depression as if it was my life so I was just wondering if someone could help me out a little with the facts I would need to know I would really appreciate.
Please and Thank You! You kiddies have no idea what it was all like. Because there were so few of us born then, we are called the Silent Generation. We should be careful what we complain about! Did anyone notice the pic on the family having to relocate. I know its best to pack light when traveling but were it all their stuff. Not even a bag each of clothes. And we think we got it bad. And these were the white folks….
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October 16, at 4: November 8, at November 11, at January 28, at Julie Grable Zini says: December 26, at January 9, at 2: October 17, at 2: December 31, at 4: January 25, at 2: February 1, at 3: March 1, at April 20, at May 8, at 1: May 15, at 4: April 10, at March 6, at October 10, at May 10, at 2: May 11, at June 27, at 8: June 26, at 3: October 2, at October 31, at 2: December 30, at 1: November 7, at 1: January 29, at 1: January 7, at January 15, at 6: This article was written last year and is completely bias.
January 16, at 8: January 28, at 2: January 28, at 8: February 5, at 3: February 8, at 2: April 22, at 8: Only if i could of helped with the Great Depression!
September 7, at 6: November 14, at 6: January 21, at 3: February 19, at 5: March 10, at March 22, at 6: May 1, at October 4, at November 16, at 8: This is great info!!!
I had to use this info for my PRE-AP English for To Kill A Mockingbird. December 4, at Leave a Reply Cancel reply Your email address will not be published. More About Us About Us Contact Us Sitemap.
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