Economical Events That Lead Up To The Great Depression Essay

Information: In the 1920s, things were really rocking in the US and around the world. The rapid increase in industrialization was fueling growth in the economy, and technology improvements had the leading economists believing that the up rise would continue. During this boom period, wages increased along with consumer spending, and stock prices began to rise as well. Billions of dollars were invested in the stock market as people began speculating on the rising stock prices and buying on margin. The enormous amount of unsecured consumer debt created by this speculation left the stock market essentially off-balance. Many investors, caught up in the race to make a killing, invested their life savings, mortgaged their homes, and cashed in†¦show more content†¦The stock became worthless and people went in to debt, because they had no money to the banks. Consequently industries such a farming, mining, textiles, and construction to have financial problems. Therefore businesses were not able to pay their debts, hundreds of banks failed. Many depositors withdrew their money savings; millions of people lost their entire live savings. Commentary: Looking back over the drastic economic events that took place during the depression there were that might have been used that might not have prevent the depression but might have loosened the impact that took place. One way that might have prevented the mass hysteria would have been, to put a limit at the bank, on withdraws. For example, instead of allowing a person to withdraw everything from their account, perhaps allow them only to withdraw small increments over a period of time rather then all at once. Banks needed insurance (such as FDCI) implemented before the crash, for prevention of problems. It was implemented after the crash had already taken place; the damage had been done. An additional suggestion might have been to disallow buying stock on margin. This would stop speculation and only people who really could invest in to the stock market would do so. Perhaps raising the percentage of what investors had to put down, to purchase stock on margin. In industry, manufacturing was based on the excellent economy at theShow MoreRelatedThe Great Depression Affects The Americans1333 Words   |  6 PagesThe Great Depression was one of the biggest events in the 1920s since it had huge effects both socially and economically.  Starting with the stock market crash, millions of investors were bankrupted and thousands of workers were unemployed. Over the next several years, not only did the consumer spending drop, the number of investment lowered as well. Until 1939, when the President Franklin D. Roosevelt established the Relief and reform measures which finally help the economy to restart. 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