Causes Of The Great Depression


Between the late 1890s, after the panic of 1893, and the late 1920s, the American people led good lives in which most prospered. In the 1920s the problems that led to the Great Depression were dispersed over a time of maldistribution of wealth, and what was called a bull market. A bull market is a stock market that is based on speculation. Speculation was a system of borrowing money to buy stocks and selling for a profit. Speculation only worked if the stock market was on the rise though. To this day people who have not been properly educated about the Great Depression believe that President Hoover was the cause. The idea that President Herbert Hoover caused the Depression could ...

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the causes rest on of different factors, but can be put under two main categories. The responsibility for the Great Depression falls not only on the Stock Market Crash, but also on the maldistribution of wealth, an unstable economy and the wild stock market practices of the 1920s.
The largest reason for the growing gap between the rich and the working-class people was the sudden increase in manufacturing during the 1920s. The people of the working class were significantly increasing their output, but their wages only increased slightly. For example, the average worker out put from 1923-1929 increased about 32%, but the average income of the worker only increased about 8% (Gusmorino, Main ). Therefore one may conclude that wages only increased one-fourth the amount production increased. Another amazing feat of the manufacturing increase was that prices for goods stayed the same, therefore the executives in the companies were keeping the mass amounts of profit that were now ...

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However, one should be reminded that Ford was not the only man in America making this amount of money, there were many people just like Ford around the Nation. Comparing the 1920s to today, one could say that such businessmen are like the Internet CEOs today. With such a growing gap in the income of the people, it was without surprise that such a catastrophic event could occur.
The Federal government also could be held responsible for contributing to the growing gap between the rich and the working-class. The President at the time, Calvin Coolidge, and the conservative Congress favored business; additionally, they supported the wealthy individuals who controlled the business. One ...

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Added: 3/18/2005 06:26:56 PM
Category: World History
Words: 3103
Pages: 12

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