The Great Depression Essay Example | Topics and Well Written Essays - 500 words

The Great Depression - Essay Example September 20th saw the crash of the London Stock Exchange after the arrest of a number of key players in that market. At this time the market’s foundation was shaky, prices were increasing and reducing frequently many people were unable to stay in the market. The market lost about 12% of its value at its opening on October 24th this was called Black Thursday. On October 28, more investors left the stock market and the market slide deepened even further. On 29th called â€Å"Black Tuesday†, the stock market traded around 15 million; the Dow had lost a sum of 68 points in the two days. Later that day a large number of stocks traded the same day made that market to lose more than $20 billion in the stock exchange. When the stock market fell, people panicked selling their stocks at lower than normal prices to anyone willing to buy. The market fall was the same for almost all countries except Japan. The U.S economy was greatly affected since most of the investors had placed their earnings in the stock market. Businesses were unable to acquire capital for new enterprises. Banks and industries became bankrupt. This led to the closure of businesses and banks, reduced money circulation, firing of employees and less production. With less income, the level of consumption of the average consumer declined. As a result of all these effects, there was massive unemployment. People had neglected agriculture and moved to the cities, this is what contributed to the effects of the market crash. There were not enough agricultural products to be sold.