How Did The Stock Market Crash Contribute To The Great Depression

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The crash of the stock market was when the economy and agriculture plummeted right after it was flourishing. This major event started in September and ended in November. All of this happened when share prices on the New York Stock Exchange collapsed. The stock market crash is also known as the Great Crash. It was a sharp decline in U.S. stock market values in 1929 that also contributed to the Great Depression of the 1930s. Before the stock market crash, there was a period of phenomenal growth. For instance, unemployment was low and automobiles spread across the country. Until the peak of the crash in 1929, stock prices went up around 10 times. The stock market crash was one of the most significant events in history. It marked the beginning …show more content…

In teh 1920’s there was a significant increase in teh production of goods and services, which lead to a surplus of products in the market. Businesses began to produce more goods than were being sold. It states, “The farmers, however, continued to produce at near record levels creating surplus commodities that sent prices plummeting. Until then, land prices had been rising rapidly as farmers and non-farmers saw buying farms as a good investment.” (“Great Depression and the Dust Bowl”)Reason 3: “Working-class Americans saw their wages drop: Even Henry Ford, the champion of a high minimum wage, began lowering wages by as much as a dollar a day.” Because factories produced more goods than there was demand for, there was an oversupply, which led to lower prices. Companies were producing at a fast and rapid pace. Too fast that people weren't purchasing as fast as they were being produced. The demand for the goods started to decline, companies were left with a big amount of unsold products. So they started to accumulate unsold inventories, which started to make profits decline. From this happening it led to a decrease in profits, which made investors sell their stocks. Many investors sold them, which ultimately led to the crash and the economy entered a period of …show more content…

Workers experienced stagnant wages, meaning that they did not have as much money to spend on things like goods and services. During the overproduction of goods in agriculture, the goods produced went up but the wges for workers didn’t. This happening led to a decline in product demand, which also led to companies to cut back on their production. It states, “Poor income distribution among Americans compounded the problem. A strong stock market relies on today’s buyers becoming tomorrow’s sellers, and therefore it must always have an influx of new buyers.American families had virtually no savings, and only one-half to 1 percent of Americans controlled over a third of the wealth. This scenario meant that there were no new buyers coming into the marketplace, and nowhere for sellers to unload their stock as the speculation came to a close,”(“The Stock Market Crash of 1929”) During the 1920's, wages for many people who worked dropped dramatically. The novel To Kill A Mockingbird doesnt directly talk about low wages but it outlines the issue of economic inequality in the south. Shows how people of different rces and social classes were treated differently and how this affected their access to education, employment, and other opportunities. Also illustrates how certain people in the Maycomb society live differently. For example the Ewell’s; a family that doesnt follow the rules and law of the society. They are

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