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The great depression: why did the stock market crash and why did that caused the depression? |
I need to find out about it for exams, I've read heaps about it on wikipedia and on the internet but I still dont understand it all. can anyone simplify it for me!!! because after world war I, americans had earned alot of money due to overtime and extra worked hours. They began to spend like crazy and obtaining loans and credit from the banks..but as time went by, Americans had a difficult time paying their loans back to their banks due to the fact that immigrants were coming in and working for cheaper wages and jobs began to dissapear as the demand for war products was reduced. This created a dominoe effect ex. an American citizen was not able to pay back the bank, the bank repossesed the car but had to sell it and loose money, businesses were not selling much meaning that people werent spending and therefore america began to collapse because there was no money being made. It wasnt until woodrow wilson came to power and offered them a deal in which he would provide jobs for americans by builduing public parks and roads for cities. He was succesful in his part, but what really helped him was the begining of WWII..this brought back plentiful jobs and americans were once again up and going. The reason that this time a depression didnt happen was because of the establishment of industries all around the country..business were targeting consumer goods and advertising was an efficient way to reach out to them...anywho you wana know more? im me slsoccerslayer7@yahoo.com America forgot to take it's Zoloft wikipedia i hate the great depression.. well the subject of it.. it bored me.. iv learned this question about a million times an di still dont know i never paid attention in class. butif i payed attention then i could of answered this for ya. lol. watch Seabuiscut are go talk to someone that lived around that time frame basically put, everyone lost faith and was based on fears The stock market crashed due to a normal downturn in the business cycle. The economy going into depression caused the stock market to crash. Unregulated capitalism has periods of growth and contraction which if it did not kill and maim people and leave them destitute would be acceptable on some level but I digress. The market collapsed mainly due to an over-reliance on credit. If you bought one hundred dollars in stock you could "margin" it and buy more stock! Companies did this as well as people. It was like anyone could print money. This is fine as long as money keeps coming in and companies keep growing....but when the economy slows and the banks/brokerages holding margin notes must now try to collect on debts from companies going out of business! It collapsed like the house of cards it was. there are several good books It was Roosevelt that created the New Deal and public works and deficit spending that you crediting to Wilson who was dead The stock market "crashed" because it was really,really tired. It caused the depression because it went off it's medication again. |
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