Wall Street Crash of October 19293668 words - 15 pages Wall Street Crash of October 1929 The roaring twenties saw a great deal of prosperity in the United States economy. Everything seemed to be going well as stock prices continued to rise at incredible rates and everyone in the market was becoming rich. Two new industries: the automotive industry, and the radio industry were the driving forces of this economic boom. These industries were helping to create a new type of market that no one had ever seen in history. With the market continuously increasing and with no foreseeable end, many individuals were entering the market because they saw the market as a sure fire way to get rich quickly. The rising prices of stocks and the large... VIEW DOCUMENT
Parallels Between The Causes Of The 1929 Wall Street Crash And The Current Credit Crisis1283 words - 5 pages The purpose of this essay is to explore the parallels between the underlying factors which led to the 1929 Wall Street Crash and the present Credit Crunch. The 1929 Wall Street crash was caused by weaknesses in the US economy. After WW1 the USA experienced a decade of economic growth generated by the levels of mass production and industrial growth during the war years. This along with the popular culture of success (the Jazz and party scene) made America appear a hugely prosperous country. However, the glitz and glamour of USA was superficial as very few reaped the benefits of this wealth. There were also many weaknesses to this economic growth as it was not achieved in a wholly... VIEW DOCUMENT
Causes of the Wall Street Crash2396 words - 10 pages Causes of the Wall Street Crash On 24 October 1929, some shareholders began to lose confidence and believing that the prices of shares could not continue to rise forever, decided to sell. A panic began, and so many shares were sold on that day that it became known as Black Thursday. The Wall Street Crash was under way. By Tuesday 29 October so many shares were being sold that the teleprinters could not keep up, share prices continued to fall, and people lost vast sums of money and were ruined. Causes of the Wall Street Crash ------------------------------- The reasons that led to the Wall Street Crash can be put into two main categories:... VIEW DOCUMENT
What were the causes & consequences of the Wall Street Crash?2045 words - 8 pages 1) The economic boom in the 1920s contributed to the Wall Street Crash. America at the beginning of the 1920s was a rich and prosperous country and improving all the time. America had been relatively unaffected by World War 1, this resulted in the factories of America selling goods to Europe to make huge profits. The people in America had a lot of money, especially those living in the city, which had good jobs. Even the farmers were getting a good income because the country could afford to purchase crops at a high rate. Most Americans were extremely happy and were enjoying their lives in... VIEW DOCUMENT
The Stock Market Crash of 1929.915 words - 4 pages "Wall Street Lays an Egg!" That's what the front page of Variety Newspaper said on the morning of October 30, 1929, as it summed up the biggest stock market crash in American history. Let me tell you a little about that... First of all, how many of you own stock or shares on Wall Street?(Pause.) All, or most of you, probably don't. Well, work with me and picture for a minute that you do. Picture that you've invested your entire life savings into shares of stock. Now, imagine for a moment that you're standing on the floor of the New York Stock Exchange waiting to find out if you've made some money from your shares. You're... VIEW DOCUMENT
The Reasons Behind The Stock Market Crash of 19291390 words - 6 pages In October 1929, the world watched in horror, investors panicked, and brokers were bewildered as stock prices plummeted lower than ever before. Fright and confusion were visible in the eyes of traders, and Wall Street was a scene of complete and utter chaos. This disastrous market crash quickly put an end to a decade of prosperity, and became the beginning to a dark and regrettable era in Canadian history (Bierman). Black Tuesday is remembered by all of us as the start of the Great Depression (Tiscali Reference). On October 29 1929 alone, thousands of investors traded 16 million shares... VIEW DOCUMENT
The causes and effects of the stock crashes1647 words - 7 pages The causes and effects of the stock crashes Almost 75 years and almost 20 years ago, there were huge crashes in New York. These crashes caused an uproar throughout the nation. Number of people died, billions of dollars lost and damaged lots of lives. Those crashes had been called most severe of the 20th century. Those crashes are symbolized as Black Days. Well, you might think that those crashes could be car crashes or plane crashes or train crashes. You might also think that if nation could have lost billions of dollars and lots of lives, those could be car or plane or train crashes. But as you thought, those were not car or plane or train crashes 75 and 20 years ago. The reasons... VIEW DOCUMENT
Stock Market Crash as the Cause of the Great Depression1201 words - 5 pages What Was the Exact Cause Of The Great Depression? The United States Great Depression leads many people to believe different stories about what actually caused it. The Stock Market Crash in October of 1929 is often referred to as the beginning of the Great Depression, but did it actually cause it? The answer is that it was the spark that lit the flame of the Great Depression. The Great depression was a financial decline that started in 1929 and lasted through most of the 1930s. Its pinpoint was in North America and Europe, but plagued countries around the world (especially developed countries). Unemployment and homelessness sky rocketed and construction practically stopped in many... VIEW DOCUMENT
How Hitler came to his control over Germany.877 words - 4 pages Hitler, a man who had the power to control the whole of Germany as of the year 1934, came across many problems shortly before 1929 which made his success rate stay down low. Hitler had always wanted to get a chance to become a powerful man within the state, but had never had the chance to accomplish it. By the year 1934, Hitler had been appointed Chancler of Germany and had been granted, not long after, five years of total control to do what ever he wanted within Germany. . A series of events had occurred during the years 1929 and 1933, which helped him achieve his goal. Between the years 1929 and 1933 Germany had been through a second great economic crisis, had concentrated on certain... VIEW DOCUMENT
Stock Market Crash of 1929 Essay1105 words - 4 pages The United States signaled a new era after the end of World War 1; an era of hopefulness when many people invested their money that was under the mattresses at home or in the bank. In the 1920s, the stock market reputation did not appear to be a risky investment, until 1929. First noticeable in 1925, the stock market prices began to rise as more people invested their money. During 1925 and 1926, the stock prices vacillated but in 1927, it had an upward trend. The stock market boom had started by 1928. The stock market was no longer a long-term investment because the boom changed the investor’s way of thinking. During 1928, the stock market was common among any class of the roaring twenties.... VIEW DOCUMENT
What caused the great depression?688 words - 3 pages The Great Depression was a worldwide economic collapse, between 1929 to the beginning of World War II (1939). The worst years of the depression were from 1930-1933. The Depression began, on October 24, 1929, when stock prices on the New York Stock Exchange dropped drastically. The financial crisis, which was due to the collapse of Wall Street, led to the Great Depression. The tumble was caused by forced liquidation of large brokerage accounts and also because of The Federal Reserve Board raising interest rates in early 1929.This brought enormous poverty and unemployment, and sent wages... VIEW DOCUMENT
Exploring Causes of The Great Depression746 words - 3 pages Exploring Causes of The Great Depression Introduction The Wall Street crash of 29 Oct 1929 and the Great Depression that followed were such a shock to most Americans that some early attempts to explain their causes blamed sunspot activity or medieval prophecy. A few held it to be divine retribution on a people who had indulged themselves in a decade of hedonism after World War I and were due for a sobering experience. Others recognized that the 1920s had brought hints of an agricultural recession, amid uninhibited business speculation. No philosophical consensus The efforts of economic historians to understand and explain the causes of... VIEW DOCUMENT
The Crash of 1929 and the Depression that Followed: Was it Avoidable?1708 words - 7 pages "No one can possibly have lived through the Great Depression without being scared by it. No amount of experience can convince someone who has lived through it that the world is economically safe." - Isaac AsimovThe Great Stock Market Crash of 1929 and the Depression that followed is perhaps one of the most memorable and unforgettable events in the 19th century. The economy began to pick up after World War I. The nation was looking for easy money to compensate for the losses in the war. The stock market became the answer. Best of all, anyone could do it; just borrow money on... VIEW DOCUMENT
The Stock Market Crash of 19291346 words - 5 pages Black Tuesday was Tuesday, October 29, 1929. This was the day the New York Stock Exchange crashed. This was the single largest crash in the country. Black Tuesday hit Wall Street as investors traded 16 million shares in one day on the New York Stock Exchange. Black Tuesday wiped out thousands of investors and billions of dollars were lost. Black Tuesday was an event leading up to the stock market crash. As a result numerous Americans lost all to a lot of their savings. Black Tuesday was also known as the beginning of the great depression which was economic recession that made Americans struggle to make money and provide food, shelter and clothing for their families. The great depression was... VIEW DOCUMENT
Great Depressioon821 words - 3 pages The Great Depression lasted from 1929 until 1940 and was the longest and worst economic collapse in American history. The downward spiral spread throughout the country like an epidemic or airborne virus. Our nation witnessed a decline in sales and goods along with the plummeting employment rate. Almost thirteen million people were unemployed by 1932. United States citizens lost practically everything they owned. Three causes that led up the Great Depression were self-centered and foolish attitudes of Americans, the economic depression of agriculture and the uneven income and wealth... VIEW DOCUMENT
How did Hitler become Chancellor in 1933?695 words - 3 pages 30th January 1933… Adolf Hitler becomes Chancellor of Germany, the consequences of which would eventually lead to the death of millions, as well as changing the world, as we know it forever. How did Hitler, a man from a simple working class background become Chancellor in 1933?It wasn't long before Hitler was voted in as the party's leader, and in 1920 the party was renamed the National Socialist German Workers Party and the new 25 Point Programme was announced including the abolition of the Treaty of Versailles, Union with Germany and Austria, a true Germany with pure Germans living there excluding Jews,... VIEW DOCUMENT
Dot com crisis1243 words - 5 pages boom and bustIn Australia, New Zealand, the EU, US and other parts of the globe the 1990s saw tremendous movements of capital as -governments deregulated financial markets, privatised critical infrastructure such as telecommunication providers and built budgets around licensing of radiofrequency spectrum or other intangiblesinterest rates fell and the money supply increased. In the US for example 30 Year Treasury Bond rates dropped from 8.17% in 1994 to 5.87% in 1999, while the M3 money supply measure grew by 34%changes to taxation and pension systems (and demographic trends such as aging of the 'baby boomers') pumped investment money into the... VIEW DOCUMENT
The Great Depression1662 words - 7 pages The Great Depression The Great Depression was the worst economic fall ever in U.S. history. The Depression began 1929 and lasted for about a decade. Many factors played a role in bringing the depression. However the Stock Market Crash in October 1929 is often brought forward as the beginning of the Great Depression, but did it actually cause it? The answer would be no. The main cause for the Great Depression was an unequal distribution of wealth throughout 1920's and a wide stock market speculation. The imbalance of wealth created an unstable economy. The speculation of stock market in late 1920's led to large market crashes. These crashes combined with unequal distribution of... VIEW DOCUMENT
Stock Market Crash & The Great Depression2207 words - 9 pages In the 1920's three pro-business presidents occupied the White House and U.S. businesses appeared to be doing well. The Stock Market was an indicator of this national prosperity. In reality under consumption was a becoming a problem and many products went unsold. Much purchasing was being done on credit and many stock purchases were made "on margin". Another indicator that things weren't as good as they seemed was that bank foreclosures were rising.In Mid-September 1929 the market erratically begins to fluctuate up and down. There were a few people who thought that this was just a temporary problem in the market. Economist VIEW DOCUMENT
Reasons Why Roosevelt Introduced the New Deal1039 words - 4 pages Reasons Why Roosevelt Introduced the New Deal There were three main reasons why Roosevelt introduced the New Deal. The first was economic and social problems in the USA, as a result of the Wall Street Crash. The second reason was because of Hoover, the president before Roosevelt; had been a weak president, and could not solve problems, and often made problems worse. The third was that Roosevelt strongly believed he could help America recover, like he himself has done when he caught polio. One of the reasons why he introduced the New Deal was because of the problems in the USA. The Wall Street Crash in 1929 affected the USA both socially and... VIEW DOCUMENT
The Labour Governments of 1924 and 1929-31 Demonstrated that the Labour Party was Fit to Govern1207 words - 5 pages The Labour Governments of 1924 and 1929-31 Demonstrated that the Labour Party was Fit to Govern In March 1924, the Conservative party lost of vote of confidence, and a minority Labour government came into power for the first time in their history. Again, in 1929, the Labour government came in to power as a minority government. The main focus of their reigns in power, was not as complicated as how well they improved the country, but just, simply whether they could rule at all. By 1931, and the fall of the Labour government, after the Wall street crash, the country was in serious economic problems, and appeared that the Labour government had failed,... VIEW DOCUMENT
Great depression1417 words - 6 pages Ashley Vogel09 October 2012Essay 1Today, we all know, or have learned something about the great depression and the effects it had on the United States. There are a list of issues the created the great depression, but have we actually thought about it, and tried to understand it before? In the 1920's the American economy was going strong, for the most part, and the vast majority of Americans had witnessed economic growth, however, stock prices fell, more and more issues arose, and then came the great depression which created uneven distribution of wealth and an irrational behavior from the stock market. In the film, Matewan, it brought up how things were tough in... VIEW DOCUMENT
great depression1417 words - 6 pages Ashley Vogel09 October 2012Essay 1Today, we all know, or have learned something about the great depression and the effects it had on the United States. There are a list of issues the created the great depression, but have we actually thought about it, and tried to understand it before? In the 1920's the American economy was going strong, for the most part, and the vast majority of Americans had witnessed economic growth, however, stock prices fell, more and more issues arose, and then came the great depression which created uneven distribution of wealth and an irrational behavior from the stock market. In the film, Matewan, it brought up how things were tough in... VIEW DOCUMENT
The Stock Market Crash Began the Great Depression1531 words - 6 pages Investing millions a year, stock investors never thought the system would fail, but one day, it all went away. The stock market crashed leaving millions without work. The Stock Market’s Crash began the Great Depression and America would reap havoc for many years. The stock market is a great way to buy part of a company & gain or loose money depending on how the company is making money buy buying a share. “The stock market is owning a small piece of the company; the stock market is owning a piece of a business” (Christie 5). Therefore, investing in the stocks is a great idea when prices are high. Furthermore, it is a hard job to keep up with everything needed to know for the job. ... VIEW DOCUMENT
Depression and Nazis809 words - 3 pages Depression and Nazis The depression of 1929 occurred due to the Wall Street crash in America. America had been lending money to Germany in a plan called the 'Dawes plan'. Once the wall street crash occurred, America wanted their money back and this lead to German businesses and banks closing. As a result of this people turned to the politicians for an answer. Many of the political parties did not have an answer. There is no doubt in my mind that this was the most important reason for Hitler coming to power. The Weimar government seemed helpless to revive the German economy. Hitler had been waiting for this opportunity a long time and when he finally... VIEW DOCUMENT
Black Tuesday.1078 words - 4 pages Black TuesdayThroughout history, The Stock Market Crash of 1929 was by far the largest slump of stocks. Before this there was prosperity. The stock market risen so high, people thought if they bought on margin they would gain millions of dollars. They were wrong, because of the people who bought on margin and other minor causes started the crash.After World War I, there was a sharp recession. This happen because of soldiers coming back to jobs and factories stopped turning war materials. At this time the president was Warren Harding. His friends took Harding's Cabinet post... VIEW DOCUMENT
The Great Depression1517 words - 6 pages America and indeed the world were on a high as the 1920's started coming to a close. The Republican Presidents who had served from the end of the First World War, Warren Harding and Calvin Coolidge, had an easy time getting the Presidency due to the publics lack of trust in the Democrats. The Republicans position was only strengthened as the economy continued to improve. The seemingly only hope the Democrats had of gaining power and the Presidency was a disaster. And a disaster they got, first obviously noticed with the Wall Street Crash in 1929. Both parties handled matters differently,... VIEW DOCUMENT
A concise analysis of 3 main problems facing the Weimar Republic from 1919-1923.547 words - 2 pages The Weimar Republic began in 1919 with Ebert as their first president. The republic faced many problems from the very beginning because of the stage Germany was in. Germany had lost a large proportion of their troops in World War I, some still believed that they had not lost, and the economy in Germany was in the most disastrous condition. Many problems cause the Weimar Republic to be unstable, such as their president and the constitution, the Wall Street Crash, and the death of influencing foreign minister VIEW DOCUMENT
To What Extent Was The 1929 â€" 31 Second Labour G1186 words - 5 pages To what extent was the 1929 - 31 second Labour Government as successful as circumstances permitted.After the 'sporting' resignation of Stanley Baldwin, Ramsay Macdonald became prime minister of a minority Labour government for the second time on the 5th June 1929. The second Labour Government took office at a time when unemployment was under 10% and arguably Britain was enjoying a period of relative prosperity. However in 1931 the government's annual pay out in unemployment... VIEW DOCUMENT
The Election of Franklin D. Roosevelt for President1481 words - 6 pages In November 1932, Franklin D. Roosevelt was elected President of the United States of America. He had beaten his Republican opponent Hoover with 89% of the electoral votes to 11%. Roosevelt also gained 22.8 million popular votes to Hoover's 15.8 million. For Roosevelt to be elected into his presidential role, it had taken several events and reasons for Roosevelt to reach that position. The previous presidential elections to 1932 were in 1928. 1928 had been a completely different climate to 1932, the 1920s in America were seen as extremely 'prosperous' and the economy was 'booming'. The unemployment rate stood at 3.7% until 1929. Working hours had ... VIEW DOCUMENT
Hitler's Rise To Power2379 words - 10 pages Hitler's Rise To Power The reason I have chosen is The Treaty of Versailles. I have chosen this reason because I feel that it played a major part in Hitler's rise to power. I feel there are a number of factors why this helped Hitler's rise to power. The Treaty of Versailles One of the factors of the Treaty of Versailles that helped Hitler's rise to power was the 'War Guilt' clause. This helped Hitler because many Germans resented this clause and he could use this to his advantage by protesting Germanys innocence to the masses at Nazi rallies. Another important factor is the reparations clause. This is an important factor because it... VIEW DOCUMENT
The Labour Government and Its Success in Achieving Its Aims in 19241229 words - 5 pages The Labour Government and Its Success in Achieving Its Aims in 1924 In January 1924 Ramsey MacDonald formed labours initial administration in coalition with the liberals his appointment of red clydesider and fellow Scot John Wheatley as health minister raised hopes of social change in Scotland. The labour and liberal governments were able to out vote the conservatives over political issues. Wheatley's 1924 Housing Act attempted to initiate an agenda of slum clearance and subsidised housing but it died with the Conservative triumph in the General Election in October. In 1929 there was a minority government so passing laws were complicated, however,... VIEW DOCUMENT
How far is it true to say that the Weimar Republic was doomed from its foundation?1361 words - 5 pages How far is it true to say that the Weimar Republic was doomed from its foundation ?In November 1918, the first republic is declared in Germany. It is however unable to survive, and only 25 years later replaced by the dictatorship of Hitler. Indeed, the democrats lacked legitimacy right from the start. Directly after the war, army generals blamed the SPD as "November Criminals", accusing them of having betrayed the German people by signing the humilating peace Treaty of Versailles. The "Stab in the back myth" was universally accepted by the people who were not a all prepared for the defeat,... VIEW DOCUMENT
The International Financial Crisis in 19291232 words - 5 pages The International Financial Crisis in 1929 Throughout the 1920's in Britain there were economic problems. Unemployment was increasing; therefore there was low domestic demand and large amounts of poverty. Markets were also being lost abroad, leading to a decrease in trade. However in 1929-31 these problems reached crisis point, when in 1929 The Wall Street Crash called for an end of American Loans to Britain, and the re-call of all Britain's debt. This had impact worldwide, as prices for goods slumped due to lack of demand and business confidence disappeared. In Britain it became clear that the 'Laissez-faire' policy was not going to work, but there was... VIEW DOCUMENT
Prosperity. More apparent than real?1004 words - 4 pages Basyirah Lattif'More apparent than real.' How far do you agree with this description of the prosperity of the USA in the years to 1929?In the 1920's America experienced a time of prosperity and went through economic and social change. Most see the 20's as a boom that was followed by a bust, The Wall Street Crash 1929, and then the depression. However there was much more going on in the 20's than a simple boom. Was the prosperity real or was it more of an illusion?The prosperity was based on several factors, such as favorable government policies.... VIEW DOCUMENT
The causes and resolution of The Great Depression642 words - 3 pages The 1930's and in general, some years following the first world war were some of the worst years in history. Billions of people worldwide were unemployed and homeless as men and women alike, in countries everywhere, struggled to support their families, and keep their children from starving. Every nation was affected; worst hit were the most industrialized, especially the United States.In America, there were many factors contributing to the sudden economic crises that was the Great Depression. However, Franklin D. Roosevelt's plan to fix the nation that was the New... VIEW DOCUMENT
The Great Depression: causes and cures648 words - 3 pages The 1930's and in general, some years following the first world war were some of the worst years in history. Billions of people worldwide were unemployed and homeless as men and women alike, in countries everywhere, struggled to support their families, and keep their children from starving. Every nation was affected; worst hit were the most industrialized, especially the United States. In America, there were many factors contributing to the sudden economic crises that was the Great Depression. However, Franklin D. Roosevelt's plan to fix the nation that was the New Deal... VIEW DOCUMENT
Explain the major factors between 1928 and 1933 that enabled Hitler to come to power930 words - 4 pages Up to 1928 there had been uncertainty in Germany, with the Wall Street crash of 1928 this uncertainty became reality as the Weimar republic fell and Hitler took power. The crushing blows of the Treaty of Versailles to Germany's economy and its public pride led to the mood of the German people becoming depressed. They were penniless, so they looked left and right for an answer to their problems. With the rise of communism and right wing socialism, democracy was steadily loosing power. With the continual use... VIEW DOCUMENT
The Great Depression1578 words - 6 pages The Great � PAGE \* MERGEFORMAT �2� The Great DepressionMany factors played a role in causing the Great Depression. A major cause of the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's. Another factor was the extensive stock market speculation by investors that took place during the latter part of that same decade which led to the panic on the stock market and the crash now called Black Thursday. The Great Depression was the most terrible and longest economical collapse of the... VIEW DOCUMENT
The Great Depression and Today1021 words - 4 pages Hardy � PAGE \* MERGEFORMAT �1� Chris Hardy & Alex KhomyakovStewart History 8th CPFebruary 8, 2009The Great Depression and TodayThe economic downturn and the subsequent recession had many on Main Street wondering what happened. America was glued to the news as we watched our stock's become worthless and our government panic; we then looked out our windows and realized it was all too real. We saw our neighbor's homes foreclosed on, and the pain that caused. The recession brought an end to the era of overspending that we all were... VIEW DOCUMENT
Law and Regulation, The Apitome of American Capitalism? The Emergance of Wall Street and New York as an International Financial Icon 1900-2002. Steele's novel "The Great Game"1764 words - 7 pages Today, Governmental law and regulation seems to be the epitome of American capitalism. But this was not always the case; in the beginning, Wall Street was a ruthless environment with almost no laws or regulatory measures. Fraud, bribes, insider trading, market corners and an overall lack of precise accounting created a tremendously unbalanced market in which small shareholders were the primary losers. Men such as Cornelius Vanderbilt, Jay Gould, Jim Fisk, Daniel Drew and Andrew Carnegie were all guilty of taking advantage of the system and... VIEW DOCUMENT
Germany's situation between 1924-291131 words - 5 pages The question of whether Germany was "dancing on a volcano" between 1924-29 relates to how successful this period of time was and whether people of that time were merely relying upon its short-term success, when it's complete downfall was to follow no later than up to five years later. As for its reliability to be seen as a true reflection of Germany's situation between period, only an examination of the foreign policies as well as political, and economical factors of the time will give us a conclusive opinion to the extent of the questioning statement.The period of 1924-1929 is seen as the high point of the Republic - a so-called Golden Period. This is especially true when you... VIEW DOCUMENT
Factors Leading to the Support of the Nazi Party1810 words - 7 pages Factors Leading to the Support of the Nazi Party In the elections of May 1928 the N.S.D.A.P. polled only 2.6% and yet by September 1930 the N.S.D.A.P. became the second largest party in the Reichstag. Explain how the Nazi Party achieved this electoral breakthrough. There are a number of important issues which demonstrate the reasons why the Nazi Party gained support and eventual power. Hitler Joined forces with the D.N.V.P. in hope of becoming more popular in a time when Germany was at its most vunerable. Hitler had strong public speaking abilities... VIEW DOCUMENT
The Weimar Republic856 words - 3 pages The Weimar Republic was formed shortly after World War 1 by the victorious allied powers. The allies believed it was necessary to set up a new government in Germany. This new government was plagued by social, political, and economical problems. The country was constantly in conflict with itself due to the fighting between the Left and Right wings of the government. Try to expand your sentences. They are mostly 'subject verb object'. The President of this new state was given too much power, along with the army. The country fell into... VIEW DOCUMENT
Casting Doubt Upon the American Dream in The Great Gatsby951 words - 4 pages Casting Doubt Upon the American Dream in The Great GatsbyThe Great Gatsby' is set in the Jazz Age of America, the 1920s which have come to be seen as a bubble of extravagance and affluence which burst with the Wall Street Crash in 1929. Fitzgerald wrote the book in 1925, and in it he explores the fundamental hollowness... VIEW DOCUMENT
The roaring 20's.1272 words - 5 pages THE ROARING 20'SThe 1920's was the "era of good feelings" because everyone seemed to prosper due to the soaring economy. New inventions, such as cars, provided new jobs, which caused the unemployment rate to drop to a mere 2%. There was such a surplus of jobs that it seemed to some people that there were more jobs than workers. In each year there was more business growth, higher wages, and increased stock market trading. This, coupled with the new assembly line was responsible for creating many new jobs and higher wages. Also, because of the assembly line and mass production, the price of items formerly reserved for the rich suddenly became affordable to the middle class. For... VIEW DOCUMENT
Untitled2142 words - 9 pages Morgan Bennett Mr. Harris History Honors- Per 5 April 2001 The Securities and Exchange Commission In 1934 the Securities Exchange Act created the SEC (Securities and Exchange Commission) in response to the stock market crash of 1929 and the Great Depression of the 1930s. It was created to protect U.S. investors against malpractice in securities and financial markets. The purpose of the SEC was and still is to carry out the mandates of the VIEW DOCUMENT
The Great Depression - 1989 words1989 words - 8 pages The beginning of the twenties started out slow with a brief recession but it didn't last long; by the early to mid twenties the economy started growing rapidly. By 1929, the Gross National Product (GNP) - the total value of goods and services produced had risen from $75 billion to $84 billion. Manufacturing output rose by 64% due to the manufacturing of the automobile, construction of new dwellings, and manufacturing of radios (Washburne, 1995). Life was good but would not last too much longer for the U.S. economy would soon be taking an unanticipated turn and enter "The Great Depression" which would last until the onset of World War II. The U.S. economy doubled its... VIEW DOCUMENT
The Causes And Solutions Of The Great Depression2273 words - 9 pages March 4, 2000 The Causes and Solutions of the Great Depression The collapse of the stock market began on October 24, 1924. Approximately thirteen billion shares were sold. The collapse was devastating and long-term. On Tuesday, October 29th, more damage was done. It became known as Black Tuesday, and about sixteen million more shares were sold. Many businesses closed, and millions of people were left unemployed. Wages for the employed dropped drastically. The value of money fell as the demand of goods decreased.In John Kenneth Galbraith's book, The VIEW DOCUMENT
Wall Street Crash 1929 Essay Examples
The 1929 stock market crash was a result of an unsustainable boom in share prices in the preceding years. The boom in share prices was caused by the irrational exuberance of investors, buying shares on the margin, and over-confidence in the sustainability of economic growth. Some economists argue the boom was also facilitated by ‘loose money’ with US interest rates kept low in the mid-1920s.
These are some of the most significant economic factors behind the stock market crash of 1929.
1. Credit boom
In the 1920s, there was a rapid growth in bank credit and loans in the US. Encouraged by the strength of the economy, people felt the stock market was a one-way bet. Some consumers borrowed to buy shares. Firms took out more loans for expansion. Because people became highly indebted, it meant they became more susceptible to a change in confidence. When that change of confidence came in 1929, those who had borrowed were particularly exposed and joined the rush to sell shares and try and redeem their debts.
2. Buying on the margin
Related to buying on credit was the practice of buying shares on the margin. This meant you only had to pay 10 or 20% of the value of the shares; it meant you were borrowing 80-90% of the value of the shares. This enabled more money to be put into shares, increasing their value. It is said there were many ‘margin millionaire’ investors. They had made huge profits by buying on the margin and watching share prices rise. But, it left investors very exposed when prices fell. These margin millionaires got wiped out when the stock market fall came. It also affected those banks and investors who had lent money to those buying on the margin.
3. Irrational exuberance
A lot of the stock market crash can be blamed on over exuberance and false expectations. In the years leading up to 1929, the stock market offered the potential for making huge gains in wealth. It was the new gold rush. People bought shares with the expectations of making more money. As share prices rose, people started to borrow money to invest in the stock market. The market got caught up in a speculative bubble. – Shares kept rising, and people felt they would continue to do so. The problem was that stock prices became divorced from the real potential earnings of the share prices. Prices were not being driven by economic fundamentals but the optimism / exuberance of investors. The average earning per share rose by 400% between 1923 and 1929. Those who questioned the value of shares were often labelled doom-mongers.
This was not the first investment bubble, nor was it the last. Most recently we saw a similar phenomenon in the dot com bubble.
In March 1929, the stock market saw its first major reverse, but this mini-panic was overcome leading to a strong rebound in the summer of 1929. By October 1929, shares were grossly overvalued. When some companies posted disappointing results on October 24 (Black Thursday), some investors started to feel this would be a good time to cash in on their profits; share prices began to fall and panic selling caused prices to fall sharply. Financiers, such as JP Morgan tried to restore confidence by buying shares to prop up prices. But, this failed to alter the rapid change in market sentiment. On October 29 (Black Tuesday) share prices fell by $40 billion in a single day. By 1930 the value of shares had fallen by 90%. The bull market had been replaced by a bear market.
4. Mismatch between production and consumption
The 1920s saw great strides in production techniques, especially in industries like automobiles. The production line enabled economies of scale and great increases in production. However, demand for buying expensive cars and consumer goods were struggling to keep up. Therefore, towards the end of the 1920s, many firms were struggling to sell all their production. This caused some of the disappointing profit results which precipitated falls in share prices.
Rapid growth in Real GDP during the 1920s, couldn’t be maintained
In 1929, there were already warning signs from the economy with falling car sales, lower steel production and a slowdown in housing construction. However, despite these warning signs, people still kept buying shares.
5. Agricultural recession
Even before 1929, the American agricultural sector was struggling to maintain profitability. Many small farmers were driven out of business because they could not compete in the new economic climate. Better technology was increasing supply, but demand for food was not increasing at the same rate. Therefore, prices fell, and farmers incomes dropped. There was occupational and geographical immobilities in this sector, and it was difficult for unemployed farmers to get jobs elsewhere in the economy.
6. Weaknesses in the banking system
Before the Great Depression, the American banking system was characterised by having many small to medium sized firms. America had over 30,000 banks. The effect of this was that they were prone to going bankrupt if there was a run on deposits. In particular, many banks in rural areas went bankrupt due to the agricultural recession. This had a negative impact on the rest of the financial industry. Between 1923 and 1930, 5,000 banks collapsed.
Note: If the question was – What caused the Great Depression? The answer would be slightly different. This is because some believe the Stock market crash was only partly to blame for the Great Depression (although it was a significant factor in precipitating it.)
7. Role of monetary policy
Discount Rate – Federal Reserve Bank of NY for US | St Louis
In the mid-1920s, US interest rates were kept low. However, if we look at the very low inflation rate, real interest rates were substantially positive.
US inflation in the 1920s
US inflation rate | St Louis
From 1928, the Federal Reserve began raising interest rates – partly concerned about booming share prices. Increasing interest rates to 6% played a factor in reducing economic growth and reducing demand for shares.