Stock Market Crash of 1929

Stock Market Crash of 1929


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Many believe in error that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even  the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered  the Great Depression.

American economic policy with Europe also contributed greatly to the overall economic slowdown of investment, production and consumption.  As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries.  Other countries were upset by America’s attempt to tax their imports and they also taxed american imports.  This caused a greater global slow down in the industrial economy.

The Great Depression was caused by a lot of factors in the American economy. Due to the bad economy, America went through a tough time of poverty. One of the major causes of the Great Depression was the Stock Market Crash of 1929, also known as Black Tuesday. The Stock Market Crash cost America fortunes and destroyed the economy. There was not enough trade to support the government and therefore America suffered financially. The banks started to fail because people were scared to invest their money in these institutions, which also hurt the economy by dropping the value of the US Dollar. People were not spending as much because either they had no money and jobs, or they feared they would lose their money.  It took at least 5 years of President F. D. Roosevelt’s New Deal as well as the World War II economy to help America fully recover from the Great Depression.