Historical Background of the Stock Market Crash of 1929 (The Great Depression)
What is the Definition of the Stock Market Crash of 1929?
The stock market crash of 1929 was undoubtedly one of the most important events of the 20th century. Its importance has not diminished even today; it completely changed the financial world. In fact, this crisis, which first emerged in the United States, affected the whole world over time.
Let’s examine the details of the 1929 stock market crash, which deeply shook North America and Europe.
What is the Definition of the Stock Market Crash of 1929?
The stock market of 1929 represents the period of the Great Depression that emerged in the USA. This economic crisis, which broke out in 1929, was not limited to the USA alone but affected almost every industrial country.
The Great Depression, which began with the complete collapse of the stock market in the USA, caused millions of people to become unemployed. In addition, many countries experienced famine, and many businesses went bankrupt.
The Stock Market Crash of 1929 Causes
The causes of the stock market crash of 1929 great depression are:
| Causes | Explanations |
| Lack of Bank Supervision | The lack of a system that supervises banks was one of the most important factors of the great depression. |
| Effects of the First World War | The USA did not receive war reparations. |
| Structure of the US Economy | The huge influence of conglomerates in the US economy. |
| Structure of the US Stock Exchange | As the stock market crashed, banks also went bankrupt. |
Each of the above factors was the root cause of the stock market crash of 1929. If we consider it in general terms, the First World War and the structure of US banks and holdings stand out among the causes of the Great Depression.
The Stock Market Crash of 1929 Effects
Effects of the stock market crash of 1929 include important details. So much so that such a major economic crisis did not remain only within the borders of the USA. In fact, the significance of the stock market crash of 1929 is quite high because the whole world was affected.
- The collapse in the stock market also affected the banks and the banks went bankrupt.
- Trading volume decreased by 60%.
- In the USA, 6 million people became unemployed.
- Most of the holdings also went bankrupt. This situation caused unemployment to increase.
- The leading countries affected by the crisis were the USA, the UK and Germany.
- Factories went bankrupt in many countries that were industrial giants.
- All these events laid the groundwork for the Second World War.
Why Did the Stock Market Crash in 1929?
The stock market crash of 1929 facts included important details that caused the Great Depression. So much so that approximately 50 million people around the world became unemployed because of this. So, what were the main criteria that played a factor in the Great Depression being so effective?
According to many financial experts, the USA’s financial policies at that time were the most important factor in triggering the Great Depression. At the same time, the First World War was one of the factors that triggered this collapse.
On top of all this, the inability of US banks to receive the loans they provided was one of the triggering factors of the depression. This is exactly why many banks went bankrupt.
How Did the Stock Market Crash Lead to the Great Depression?
Black Tuesday, October 29, 1929, was one of the most depressing days in the world. The New York Stock Exchange collapsed on this date, beginning the Great Depression.
Because of the stock market crash of 1929, people in many parts of the world had to fight hunger. The reason for this was that agriculture also declined significantly.
The World After the Stock Market Crash of 1929
The stock market crash of 1929 is the largest economic crisis in history. So much so that this economic crisis was also effective in the outbreak of the Second World War. Nazi Germany gained power both after the First World War and with the effects of the Great Depression.
Due to its effects, it is also possible to say that the great depression was not only an economic disaster but also a social crisis.
Frequently Asked Questions
In this article, we talked about the causes and effects of the stock market crash of 1929. In this section, we would like to answer frequently asked questions on the subject.
What Caused the Stock Market Crash in 1929?
The main factor in the Great Depression was the banks’ credit problems. Also, WWI caused economic collapse.
Who was the Blame for the Crash of 1929?
Banks’ credit problems are generally considered the biggest cause of the Great Depression of 1929.
What Was the Wall Street Crash in 1929?
The stock market crash of 1929 is also known as the Wall Street Crash. The collapse of Wall Street was the ignition factor that caused the Great Depression.
How Did the Great Depression End?
The industry that developed again after WWII was one of the most important details that ended the Great Depression.
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