Great Depression Research Paper

The cause of the Great Depression, the worst economic depression in US history, was not just one factor but a series of domestic and other worldwide conditions that led to this outbreak. It was one of the key turning points of the twentieth century. Walton and Rockoff pointed that the already slow decline from 1925 to 1927 erupted into a rapid decline in 1928. The authors also addressed that part of the agricultural issues with farmers struggling with indebtedness and falling prices also contributed to the built up of the Great Depression (Rockoff 420). The first strike was the stock market crash of 1929. Unlike the crash 1987, the crash in 1929 created uncertainty on future development of the economy as well as billions of dollars lost for stockholders. The event occurred when the Federal Reserved decided to raise discount rate to 6 percent in order to increase steady flow of credit into the stock market, which other central banks decided to follow such as the Bank of England. Other advisors such as Roger Babson warned about the upcoming crisis but tensions were unbroken. However, during the last week of October when 13 millions of shares were traded by banks and investment houses, trouble began to sprout out and panic arises in the public. By mid-November, stock prices had reduced to about one-half of the original value in August. Two months of the original collapse in October, stockholders had lost more than $40 billion dollars. Although the stock market began to regain its losses by 1930, it was not enough and American entered into a trauma that is called the Great Depression. People withheld purchasing durable goods, which was “depended on consumer confidence” because of their uncertainties about the economy in the future (Rockoff 423). The crash which fuelled a decline in the economy because spending dropped