How did the Great Depression in 1930 come about?
The Great Depression of the United States in 1929 was a decade long, worldwide depression where the stock market was at an all time low.
The Great Depression was caused by many things. The most known and notable cause of it was the Wall Street Crash. The Wall Street crash was a crash in the stock market. Billions of dollars were lost. The Federal Reserve (America’s Central bank) kept raising the fund’s rate in 1928. This led all the way to October the 29th 1929. On this day, all the money that America gained that year was lost. The day that this occurred was named BLACK TUESDAY. 14 Billion dollars worth of shares were traded that day. After two months, America’s market had lost over 40 billion dollars.
Banks started to fail as well, as the public wanted to withdraw their savings. When the banks couldn’t pay off all the people, they were forced to close. Over 9000 banks went out of business during the Great Depression. By the end of 1930, America was in the deep end and entered into a Great Depression.
There were also other causes of the Great Depression. After the Wall Street Crash, people started to purchase less and less items. This meant that fewer items were manufactured and fewer people were needed to work. Because of this, the unemployment line rose by 25%.
In addition, America started to increase the tax for importing goods. Following this, fewer trades were happening between America and other European countries. So no money was being brought in.
All of these causes led to America having one of its worst periods ever. Unemployment was high, starvation-caused deaths increased, industrial production dropped, the banking system collapsed and many people had to live on the streets in areas known as HOOVERVILLES. All of this came about after the crash of the stock market in America.