There are many theories as to why the United States and then much of the world entered into a long period of price deflation, high unemployment, and an overall significant economic downturn, which we now call the Great Depression. People always wonder why this horrendous event occurred and there is no simple answer to this question. It was a perfect storm of events that came together and brought about an inevitable plummet in the lives of millions. Perhaps the opening shot of this dark period was the stock market crash in October of 1929. Nothing had happened like it before that moment. In the aftermath, the rest of the country and the world fell into the Great Depression, the longest and deepest economic depression since the Civil War.
During the 1920s, the United States economy was growing and the stock market kept reaching new highs. Lot of common people were making money in the stock market and having a grand time; unfortunately, there were ominous clouds few noticed on the horizon. By that time, industrial production had started declining and unemployment was already rising. The signs were there, but many were ignored. Some of the causes of the collapse were the explosion of debt, low wages, an agricultural industry that was struggling, and large bank loans that were unable to be liquidated.
Prices started to decline from the stock market peak in September of 1929, and on October 18, the market began to fall dramatically. Panic began to set in with the traders and investors, and on October 24, known as "Black Thursday," the market lost 11 percent of its value on the opening bell in heavy trading. Investment companies and bankers tried to stabilize the market through purchasing blocks of stock, producing a moderate improvement by Friday. However, by Monday, the market was in trouble once again. On October 29, over 16 million shares were traded in just one day.
©2016 Doug West (P)2016 Doug West