A Closer Look at the Great 1929 Depression in the United States

A Closer Look at the Great 1929 Depression in the United States

  • Submitted By: mitto666
  • Date Submitted: 02/01/2009 1:09 PM
  • Category: English
  • Words: 1851
  • Page: 8
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The Great Depression In the United States of America Name: Mohamad Mahfouz ID: 200600136 Instructor : Ms. Mona Chahine The Great Depression In The United States Of America The United States of America is known as the most powerful country in the world, by its economy, military equipment and of course the way that Americans know how to deal with bad situation. In 1929 the depression begun, and made the life of millions a nightmare that will never vanish until decades. The United States was actually facing a kind of a world war three, millions of people in the country lost their jobs and their houses. The main causes of the great depression in 1929 were: the unequal distribution of wealth, the stock market crash, bank failures, and reduction in purchasing. The crisis started when entrepreneurs liquidated their assets for the debt payments, also when households were forced to default on their mortgages. Both entrepreneurs and households converted the cost and the land to use regulations to magnify the effect of adverse shock. At that time people who borrowed money could not return it back because of the lack of funds and the high interest that was killing people. (Bhattacharjee, C. Higson, 2009). A bank member for example borrowed 500 million dollars from the bank of new York at a low interest rate, at that time the fed interpreted things in the 1920’s and 1930’s saying that it was a state of monetary ease. For that issue the bank believed that members only came to the window when they really need it and were in a huge trouble. In 1930 and 1931 the fed were relieved because no borrowers came at the window and they thought that everything is ok, and the plan is actually working, this is the point that shareholders missed and ignored the future consequences of it which created a disaster. (Randall E.Parker, 2007). People get excited when they see a house, so they go to a bank to borrow money that they cannot afford it, hoping that some day they would be able to...

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