Causes Of The Great Depression Essay -- American History

Between the new-fashioned 1890s, after the panic of 1893, and the late 1920s, the Ameri gouge concourse led good lives in which most prospered. In the 1920s the problems that led to the broad Depression were dispersed over a time of maldistri thoion of wealth, and what was called a bull marketplace. A bull market is a carry market that is based on speculation. Speculation was a organization of borrowing money to buy melodys and selling for a profit. Speculation lonesome(prenominal) worked if the note market was on the rise though. To this day people who return non been properly educated about the Great Depression remember that President Hoover was the cause. The idea that President Herbert Hoover caused the Depression could digest arisen from the fact that he was the President at the time the Depression began. However, the people who do not believe that President Hoover was the cause arrest the ram down of the stock market in 1929 as the real culprit. The honor behind the stock market crash is that it was the event that caused the already uncertain deliverance to go over the limit.If the president and the stock market crash did not cause the Great Depression, then what did? According to research make on the Great Depression, the causes rest on of different factors, but can be put under two main categories. The responsibility for the Great Depression falls not scarce on the Stock foodstuff Crash, but also on the maldistribution of wealth, an unstable economy and the wild stock market practices of the 1920s.The largest reason for the growing gap between the rich and the low- division people was the sudden increase in manufacturing during the 1920s. The people of the working class were significantly increasing their output, but their wages only increased slightly. For example, the fair worker out put from 1923-1929 increased about 32%, but the average income of the worker only increased about 8% (Gusmorino, principal(prenominal) Causes of th e Great Depression). Therefore one may conclude that wages only increased one-fourth the amount production increased. Another amazing transaction of the manufacturing increase was that prices for goods stayed the same, therefore the executives in the companies were keeping the mass amounts of profit that were straight coming into the company. In fact, one can see that top executives in a certain company increased significantly because their salaries from 1923-1929 rose 64% (Gusmorino, Main Cau... ...cantly, and investors began selling apace. On the following Tuesday and Wednesday the prices began to stabilize. Then on Thursday, October 24, stock prices fell hard and even the biggest investors gave up on the market and interchange their stocks. On the following Tuesday the stock market fell and the market was not able to get back up. This day is forever known as Black Tuesday, and the official start of the Great Depression.The speculation and the resulting stock market crash act ed as the trigger for the already unstable United States economy. due(p) to the maldistribution of wealth and the unstable economy of the 1920s, the nation headed into a decade of trouble. In response to its economic difficulties, the United States set up even high trade barriers with other nations, causing more trouble within the nation. many another(prenominal) of the working class lost their jobs, and since these people did not have savings, they were in big trouble. Unemployment grew to 13 million by 1932 as the country quickly spiraled into a catastrophe. The Great Depression had begun due to the maldistribution of wealth, a bad economy based on over confidence, and the irresponsible erratic of the bull stock market.