Economical Events that lead up to the Great Depression

A detailed Summary of Economical Events that lead up to the Great Depression


In the 1920's, 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 safer investments such as treasury bonds and bank accounts. As the prices continued to rise, some economic analysts began to warn of an impend


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.

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.

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.

Some common words found in the essay are:
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Approximate Word count = 595
Approximate Pages = 2 (250 words per page double spaced)

Category: History

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