1929 America crisis Research Paper Example | Topics and Well Written Essays - 1250 words

1929 America crisis - Research Paper Example In this paper, I will start with an overview of the great depression. I will also look through the causes that have been considered to lie in the base of the American crisis of 1929. Finally, I will also dwell on social and economic effects of the great depression on America and conclude by looking through the end of the Great depression in America (Burg 90). OVERVIEW OF THE GREAT DEPRESSION The years preceding the Great Depression were marked by economic recovery evidenced by a rise in stock prices in 1928. The situation of trade in the preceding year also greatly mushroomed, and Americans were so engrossed in their economic prosperity that it became very easy for an individual to access a credit. The signs of a fluctuating economic situation became noticeable in the autumn of 1929, and the crisis was a surprise and a major blow to those who were caught unaware. This was followed by several activities by financial movers to save the economy: it is on Tuesday in October 1929 that 16 million of stock shares were directly traded, and the industrial index declined by the amazing 10%. Within the period that followed, shares of stock continued to lose their value at more than a half. It is these events that marked the official beginning of the American crisis of 1929 (Watkins 67). CAUSES OF THE GREAT DEPRESSION IN THE USA ... In the period of 1928 and 1929, however, the value of the shares of stock grew to so much higher levels than the value of the companies they represented that this resulted into an inappropriate situation where the companies could not meet up with the value of their stock shares (Fearnow 89). Another major cause of the Great depression in America was the behavior of Americans who used to buy on credit which was on the rise in the 1920s. This was a period of a marked economic boom, and this placed people in a situation of less thought and care about their future. There was a lot of installment buying where many people bought cars and electronics of high value which did not match the money they had in the possession or in savings. The availability of installment buying encouraged so many people to buy things on credit that when the stock market came to a crash, many people were left with huge debts to settle. This was followed by many people losing their jobs, and it became virtually im possible to settle their highly accumulated debts (Kupperberg 98). The supply and demand situation also played a great role in contributing to the start and lengthening of the Great Depression in America. During the period of economic prosperity in the 1920s, the American manufacturing industries and agricultural sectors produced large quantities of goods and services. This resulted in the market acting up with an increase in prices which was not marked by the adjustment in American workers’ wages which remained constant, but the workers had no more to keep up with the soaring prices, therefore, they stopped buying the goods and services. Factories, however, did not adjust their