Causes of the Great Depression: Bank Failures and the 1929 Stock Market Crash

Causes of the Great Depression: Bank Failures and the 1929 Stock Market Crash

The Great Depression was a severe economic crisis in the United States (U.S.) that began in 1929 and lasted until 1939. It was marked by the sharp decline of all economic indicators. The rate of unemployment and inflation reached unprecedented levels. Millions of workers lost their jobs along with their assets. The financial and agricultural sectors spiraled downward, and the value of the American dollar declined steadily (Kupperberg 3). The economic difficulty was also felt throughout Europe, Asia, and South America. The Great Depression was caused by a plethora of factors including the stock market crash of 1929, high tariffs on European imports, bank failures, unequal distribution of income and wealth among citizens and corporates, and drought conditions (Kupperberg 14). This paper will focus on two of the most significant causes of the crash, that is, bank failures and the 1929 Wall Street Crash.

The decade that followed the First World War was a period of boom in the United States. Americans had great post-war optimism, and there was a drastic change in their lifestyles. There was a new wave of consumerism (Gow 9). The newly introduced concept of hire purchase or buying on credit enabled families to afford goods such as radios, washing machines, refrigerators, and cars that w

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