Causes of the Great Depression :: American History Economics Economy Essays

Causes of the Great opinionThe Great Depression was the worst economic slump ever in U.S. history, and one which sprinkle to virtually the entire industrialized world. The depression began in late 1929 and lasted for active a decade. Many factors played a role in pitch about the depression. The main cause for the Great Depression was the combination of the greatly unequal distribution of riches end-to-end the 1920s, and the extensive stock mart speculation that took place during the latter part that same decade. The misdistribution of wealth in the 1920s existed on many levels. Money was distributed disparately surrounded by the rich and the middle-class, between persistence and agriculture within the United States, and between the U.S. and Europe.This imbalance of wealth created an equivocal economy. The excessive speculation in the late 1920s kept the stock food commercialize artificially high, but eventually lead to large market crashes. These market crashes, combined with the misdistribution of wealth, caused the American economy to capsize. The roaring twenties was an era when our realm prospered tremendously. The nations total income rose from $74.3 billion in 1923 to $89 billion in 1929(end personal line of credit 1). However, the rewards of the Coolidge Prosperity of the 1920s were not shared evenly among all Americans. tally to a study done by the Brookings Institute, in 1929 the twinge 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 atomic number 1 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 gazillion (end note 4) in the same year that the just personal income was $750(end note 5). By present day standards, where the average periodical inco me in the U.S. is around $18,500(end note 6), Mr. Ford would be earning over $345 million a year This misdistribution of income between the rich and the middle class grew throughout the 1920s. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a stupendous 75% increase in per capita disposable income(end note 7).A major reason for this large and growing gap between the rich and the working-class people was the increased manufacturing output throughout this period.