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Main Causes of the Great Depression

  • Date Submitted: 01/28/2010 06:29 AM
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The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually


  all of the


  industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors


  played a role in bringing about the depression; however, the main cause for the Great Depression was the


  combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock


  market speculation that took place during the latter part that same decade. The maldistribution of wealth


  in the 1920's existed on many levels. Money was distributed disparately between the rich and the


  middle-class, between industry and agriculture within the United States, and between the U.S. and Europe.


  This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept


  the stock market artificially high, but eventually lead to large market crashes. These market crashes,


  combined with the maldistribution of wealth, caused the American economy to capsize.


 


  The "roaring twenties" was an era when our country prospered tremendously. The nation's total realized


  income rose from $74.3 billion in 1923 to $89 billion in 1929(end note 1). However, the rewards of the


  "Coolidge Prosperity" of the 1920's were not shared evenly among all Americans. According to a study done


  by the Brookings Institute, in 1929 the top 0.1% of Americans had a combined income equal to the bottom


  42%(end note 2). That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of


  Americans had no savings at all(end note 3). Automotive industry mogul Henry Ford provides a striking


  example of the unequal distribution of wealth between the rich and the middle-class. Henry Ford reported


  a personal income of $14 million(end note 4) in the same year that the...

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