Great Depression

Great depression was a severe worldwide economic depression following the stock market crash in 1929. On October 29, Black Thursday, the stock market crashed heavily, and continued to fall sharply throughout the coming weeks. As a result, the United States and the world were thrown into a decade of poverty and unemployment. It was the longest, widespread depression in world history. It has devastating effect in every country, rich or poor, and personal income. In which unemployment remained high for an extended period of time and many business failed. It was the beginning of government involvement in the economy and in a society at all.

Before this day the stock market had grown considerably, making companies profits go up. “General Electric had tripled in value which came out to about $396 per share of stock”. After October 29th, 1992 many business lost thousands of dollars, money that had just seemed to vanish into thin air, never to be seen again. The stock market crash was followed by many cuts that had to be made by businesses concerning how many workers they could have and how much to pay the workers that they could keep.

A combination of domestic and worldwide condition led to the Great Depression. The main reason was the crash of the stock market and due to these, individuals from all classes stopped purchasing item. This then led to the reduction of number of items produced and thus a reduction in the workforce. As stock price raise with no hope of recovery, panic struck. The stock market, which had appeared to be the surest way to become rich, quickly became the path to bankruptcy.

Since most banks had invested large number of their client saving in the stock market, these banks were forced to close when the stock market crashed. Which caused another panic in the country. Business and industry were also affected having most of their capital crashed in the stock market crash and with the bank closure. Since there was no way for the bank’s clients to...