The Depression started with the market crash of 1929. Unemployment was on a rise, businesses were failing. The reason of that is because the stock market was doing badly, there were overproduction and a crash which is stock prices go down. Many people lost their jobs and those that were still working had to take major pay cuts, and people who were trying to get a job couldn't because the employees couldn't pay them.
In October of 1929, the worst and longest depression of American History began. The Great Depression marked the end of the roaring twenties and the beginning of what would become a very long economic struggle. The depression began when the stock market crashed. Many investors dumped their stocks and ran for the banks to clean out their bank accounts because most of them bought stocks on margin and were going to lose all of their money. So many people were afraid and did this that there were many banks that ran out of money to give people and had to close.
While the accounting was marked to market, it wasn’t being handle the traditional fashion way with trading prices dictating its value. Instead Enron used its own projections to account in the first year anticipated income from contracts that were a decade or more long. This caused the increase of the stock price without a solid base to justify its true value. This action set up the course for them to lie on every subsequent year to cover up the lies from the prior year. It became such a big snow ball of lies that it took down one of the biggest corporations in American history.
Since so many banks had invested their client’s money in the stock market, they were forced to close once the market crashed and the client’s money had vanished. When the American people saw how many banks were closing, they rushed to their bank if it had not already shut down, to withdraw their savings before it was too late. This “rush on banks” caused a second wave of bank closures and bankrupted consumers if they were not lucky enough to get to the bank in time. Financial downturn then trickled down into the business sector because most institutions had their capital either invested in the Stock Market or held in a bank. Failing businesses led to double digit unemployment rates and a huge cutback in consumer spending on even the most basic items.
They had also not yet learned the importance of limiting the amount of money they leant and to whom. During the Great Depression more than 9000 banks closed and millions of people lost their life savings. When the banks closed people became scared and stopped spending as much. The drop in spending caused companies to lay off workers. This caused more banks to close, followed by more reduction in spending and then more employees were laid off.
Before the depression occurred, companies were making more goods than consumers were buying and because of this many employees were laid off and since no one had the money to pay their debts. So to make up for this lost cash everyone wanted to sell their stock and since everyone wanted to sell their stocks and no one wanted to buy stocks the value of stocks fell dramatically, This can be shown in the quote “A panic set in. Soon everyone wanted to sell their stock at the same time,” which shows how people reacted to the large fall in stock value. When the economic collapse occurred this caused the price of goods to rapidly deflate. And because Canada relied on the income of exports, many businesses and manufacturers became bankrupt.
How successful was Franklin Roosevelt in dealing with the depression between 1932 and 1941? The depression between 1932 and 1941 was the worst economic crisis of the twentieth century. Two of the main causes of the depression were the Wall Street Crash and the unequal distribution of wealth, bank and farm failures were also a major factor. Basically, as banks failed, companies failed; therefore, people were left out of work, with less to spend. In turn causing more companies to fail and become bankrupt, leaving their workers unemployed.
This was because unemployment was rising fast (Doc. E), which meant people were spending less to the point that it caused a huge shortage of income to many companies and businesses. The stock exchange was a replacement of work, where people risked their money on what they speculated would do well (Doc. F). Since the unemployment rate was high and businesses were failing, the stock market went through a dramatic crash causing many people and companies to go bankrupt.
Ethan Latson Jr. Miss. Casertano Eng 9 B/ block 1 4/12/2014 The Great Depression The Great Depression was the most tragic moment in history because of the devastating impact it had on the lives of Americans. On 1930 the stock market started going downhill very fast. Banks were not established well enough,as well as President Hoover’s lack of trust in the government, and because people debt were so great they could not pay it off. Many lives were lost because of this.
The reason of that is because the stock market was doing badly, there were overproduction and a crash which is stock prices go down. Many people lost their jobs and those that were still working had to take major pay cuts, and people who were trying to get a job couldn’t because the employees couldn’t pay them. Banks were closing, people were losing their life saving. A large percent of business and factories were closing On Black Thursday, The Wall Street Crash of 1929, October 24 also known as the Great Crash was terrible, it was the worse stock market crash ever. There was a huge crowd of people trying to withdrew there life saving but couldn’t.