The Great Depression- Major causes.
The Great Depression was a period when persisted the unprecedented decline to respecter in economic activity, and caused something called worldwide depression and was caused for many different events, the most five important causes of the Great Depression were The Stock Market Crash of 1929, Banks Failures, Reduction in Purchasing Across the Board, American economic Policy with Europe, an d The Drought Conditions, all t hose events contributed and were the most important causes of The Great Depression.
The stock Market Crash of 1929: this cause was based in many erroneously that the Stock Market Crash that occurred on Black Tuesday, October 29, 1929, is one and the same with Great Depression, most people sold sold their gaining stocks for a profit. The Stock Market caused price to earnings ratios were above historical averages.
The Bank Failures: this cause more than 28 million shares changed hands in frantic trading The Federal Reserve was involucre because they board warned member banks not to lend money for stock speculations. This caused many banks to go down and fail. Speculators who borrowed lots of money from the banks can buy stocks but hey could not repay the loans for the reason that they could not sell stocks. This cause intensified the course of the Great Depression, throughout the 1930' s over 9000 banks failed. Banks deposits were uninsured and thus banks failed people simply lost their savings. The authorities appeared unable to stop banks runs and then this caused a collapse in the banking system.
The Reduction in Purchasing across the Board: this cause with the stock market crash of 1929 and the tears of further economic woes, individualism from all classes stopped purchasing items. This event caused more unemployed.
American Economic policy with Europe: was a cause of The Great depression because as businesses began failing, the government created the Smoot- Hawley Tariff in 1930 to help protect American companies. The unintended consequence of this tariff was that less trade between America and foreign counties.
The Drought Conditions: this event was a cause of the Great Depression because people lost their farms, Drought Conditions and wind ma de farming hard. Between 1939 and 1934, creditors took possession of almost a million farms that some farmers destroyed their crops, they hoping the reduction in supply would cause the prices to go up.
The New Deal: well this event is considered on one side, it can be argued that The New Deal was a success but on the other side, there are arguments that the New Deal fail. For example , relief was a success because millions of people received relief, help with their mortgage, jobs, etc.