Eddie6063

What Are the Causes and Effects of the Great Depression?The Great Depression has affected the United Sates in many ways and has caused a loss that we can never fully recover from. It was gap in U.S. history that had cost us many lives and jobs. The depression began in late 1929 and lasted for about a decade. The 1920’s or “The Roaring Twenties” played a big role in causes of the great depression. The 1920’s were a time of peace and great prosperity. After World War I, the “Roaring Twenties” was fueled by increased industrialization and new technologies, such as the radio and the automobile. Air flight was also becoming widespread, as well. The economy benefited greatly from the new life changing technologies. As the stock market soared, many investors quickly snapped up shares. Stocks were seen as extremely safe by most economists, due to the powerful 1920s boom. Investors soon purchased stock on margin. Margin is the borrowing of stock for the purpose of getting profit. If a stock drops too much, a margin holder could lose all of their money and owe their broker money as well. From 1921 to 1929, the stocks rocketed. Millionaires were created instantly. Soon stock market trading became America’s favorite pastime as investors bought stocks to make a quick profit. Investors mortgaged their homes, and foolishly invested their life savings in hot stocks, such as Ford and RCA. To the average investor, stocks were a sure thing. Few people actually studied the fundamentals of the companies they invested in. Thousands of fraud companies were formed to trick uneducated investors. Most investors never even thought a crash was possible. To them, the stock market “always went up”. By 1929 the stock market reached its all time high and investors were buying stocks by the dozen. Then all of a sudden prices started lowering. All investors sold their stock buy no one wanted to buy. This one day had caused a decade of Depression. The causes of the Great DepressionIn 1929 a panic on the New York stock Exchange introduced a mouth dropping effect. The stock market that had been giving everyone the profit they wanted collapsed. Several events that occurred before 1929 caused this to happen on a long term basis. During the roaring twenties everyone was prospering and making profit. The manufacturers were trying to sell there products to as much financial groups as possible, but they were unable to lower there prices so the poor can buy there products. (Lamb, Annette 2008). The government came out with the process of credit. It worked by a person buying a product over time paying a monthly bill. For example, if someone wanted to buy a washing machine that cost $500 but they only had $100. They would pay there $100 and then pay a certain amount every month till the washing machine was paid off. The government also charged the buyers more than the product actually cost in stores, so in the end they wound up paying more than the original price. This process put many Americans in debt. In record almost every American spent 75% of there yearly income on consumer goods. (Lamb, Annette 2008). When Americans put more on credit than they could afford they went into debt. This happened to many Americans making the nations total go down and causing a worldwide problem.The short term reason for the stock market crash of 1929 was the middleclass people getting into the stock market. Middle income people started buying stocks on margin in order to get themselves in on the economic boom the U.S. was having during the roaring twenties. At that time there were soaring prices for stocks. People paid a small percentage of a stock's price as down payment and borrowed the rest from a stockbroker. (Lamb, Annette 2008) The system worked well as long as stock prices were rising. If they fell, however, investors would have no money to pay off the loan. In September 1929, some investors began to think that stock prices became too high. They started selling their stocks, believing prices would soon go down. By Tuesday October 24, the gradual lowering of stock prices had become an all out slide downward. A panic resulted. Everyone wanted to sell stocks, and no one wanted to buy. Prices plunged to a new low on Tuesday October 29. A record 16 million stocks were sold. Then what Americans thought could never happen, the stock market collapsed. The effects of the Great DepressionThe Great Depression affected not only the people but the country as well. International trade and industrial production dropped sharply right after the stock market crash of 1929. Wages shrank, unemployment rose, and widespread misery proved that something was wrong with the economic system. The whole world felt the impact of this tragedy but Americans suffered it the worst. (Slee, Tom 2008)What people in America noticed almost instantly about the Depression was the reduction of their incomes. In addition to millions of wage earners who were thrown out of work entirely, millions more became part-time laborers. Even those who kept full-time jobs often had to accept a reduction in wages. (Slee, Tom 2008) In addition to the cut wages the Depression also affected international trade and manufacturing which shrank rapidly and filled many people with apprehension. In 1929 the estimated value of United States imports and exports had reached almost ten billion dollars. (Mandel, William 2008). By 1933 the value had dropped to three billion. Furthermore, American industrial output was cut in half. This had a big affect on the United States because most of there exports were used by the government to pay bills. With all the people taking there money out the bank to try and recover their savings, the banks went bankrupt. Thousands of banks were forced to close as a result of this. Business owners also suffered from the Depression. With there bills and debt rising they were no longer able to pay there workers or buy their products, and were forced to fire many workers. (Mandel, William 2008). It was hard to find affordable materials and eventually many businesses had no choice but to close. The dislocation of trade and industry, the falling prices, and the rising unemployment that came with the Depression forced statesmen and economists to seek remedies. But the experts could not agree in what was wrong or what measures would prove most effective in restoring the U.S economy. The solution to this problem would soon come. (Mandel, William 2008). During the 1930s the government was providing weapons, tanks and other much needed necessities to Great Britain under the lend-lease act. This was a pre-start to the coming war effort. In 1939 when America was hit at Pearl Harbor, World War Two struck out. Many Americans enlisted to go to war in order to get money and start a new life for there families. (Mandel, William 2008). With all the needed supplies for the war, the government hired people in factories to make weapons, munitions, tanks, airplanes and any other supplies needed for war. This was a big opportunity for unemployed people and many took the job as factory workers. As the unemployment rate was lowering so was American debt. (Mandel, William 2008). With people getting money and paying off there bills, they were able to buy everyday items to keep them going. This cycle opened many more businesses and eventually pulled the United States economy out of the Great Depression.ok well this is my social studies report on the causes and effects of the great depression. it is split into three parts. the first is the introduction and explains what led up to the great depression. the second is the causes and the third is the effects. i just need you just to edit my grammar and punctuation and im good. also i still need a conclusion if you can help me with that. ohh yea and the names with parenthesis and years are just giving credit to the sources i used. don't ask my teachers made me do it....i did this all in like a night and i think i deserve to get it edited for all the work i went though. and i suck at grammar so i cant edit it myself.

goldbareye

no one going to read this hole thing it way to long are you crazy

rodixeT

Amen.

luketaylor

E-mail me at musicallytalented@live.com. I would be happy to edit it for you! Just give me your email address.

bizarre_renee

Forget the Answerer #1. I will read it for you =]I didn't find anything wrong with it. Not one bit. Everything was factual and straight to the point. You didn't confuse me, one bit!!!Do you have pictures of the Depression? http://www.forties.net/files/migrant_mother_1936__great_depression.jpghttp://userwww.sfsu.edu/~hlcooper/images/HIST%20450%20Images/DLangeMigrantMother.jpghttp://history1900s.about.com/library/photos/blyindexdepression.htmLove the report!!!!!!!!!!