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Cause Stock Market Crash of 1929

Detail The Great Depression started in the United States with the Stock Market Crash. The crash took place on October 24, 1929, a date that was called “Black Thursday.” That day 12.9 million shares of stock were traded. Before long, national newspapers began covering the activity with the stock market. This prompted many people to begin pulling out of the market on Monday, October 28. The market was down 13 percent by the end of the day. The next day, known as “Black Tuesday”. In total, $30 million was lost during the five-day period.

The Dust Bowl

The Dust Bowl was a weather-related occurrence that happened in the United States from 1930 to 1936. It consisted of dust storms that would cause much damage to the American lands. There were severe droughts, a normal occurrence in these areas, made worse by unwise farming practices. When deep plowing of the land occurred, the grass was destroyed. This caused the soil to dry up. When a wind would come, the dried-up soil would turn into dust and blow to the east and the south. The states most affected by the Dust Bowl were Kansas, New Mexico, Oklahoma, Texas, and Colorado.

Smoot-Hawley Tariff

The Smoot-Hawley Tariff Act has been blamed by many as one of the reasons why the Great Depression was made worse in the United States. The tariff reduced international trade and caused retaliatory tariffs to occur in other countries. Many products were hit hard by this decline. Historians have stated that the decline in prices of farm exports had caused many farmers in the United States to default on their loans.


The United States found itself in a significant amount of debt at this time. Americans had grown dependent on cheap credit. In the short term, it seem liked a good idea. But over time, both consumer and commercial debt began to mount. Those who were already in debt when the prices for products decreased risked going

and there was nothing that the Federal Reserve could do to correct the situation. Roosevelt would try to fix the problems of the Great Depression by implementing many new programs and policies under the New Deal. about 9. because there must be a little bit of gold that backed the credit being issued. US Business When Franklin Delano Roosevelt was elected United States president in 1932. The Federal Reserve allowed the money supply in the United States to shrink by one-third from 1929 to 1933. . he blamed the big businesses that were prevalent in the United States. Banks were now in a panic. the Federal Reserve had reached the limit. By the time the Depression began. Originally. The debt continued to grow in the United States. US Federal Reserve Monetarists have accused the United States Federal Reserve System of making poor choices that allowed for problems in banking in the United States to continue. resulting in an unemployment rate of 25 percent. felt that business had too much unregulated power. In total. Roosevelt. remained at the same dollar amount. however. All of the debts. people began to panic. would have caused just another recession. But thanks to large banks such as the Bank of the United States failing. Businessmen were not able to get new loans. The amount of credit that the Federal Reserve could give out was limited.into default. the downward turn of the economy. During his many terms in office. A significant number of layoffs occurred.000 banks failed during the 1930s. along with the majority of Democrats. however. thanks to the Stock Market Crash. This was due to the price of products and the average income of a United States citizen falling close to 20 to 50 percent. Those who worried about their money began to withdraw the majority of their money from the bank. nor could they renew their old ones because there was little money available. Banks were now forced to build up their reserves and give out fewer loans to people.