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

Great Depression - Essay Example Many dynamics factored into bringing about the Great Depression but there were two central contributing causes. The first of these was that the wealth of the nation was unevenly distributed. A middle class, as we would define it today, did not exist. The country was literally divided between the ‘haves and the have nots.’ Some very few people had enormous wealth and power while a much greater number of the population consisted of those struggling to pay the bills each month. This condition established an unstable economy requiring only a small thing to send it off the tracks. This condition then combined with inflated speculations among the majority of stock market investors much like what has occurred recently in the marketplace. â€Å"The excessive speculation in the late 1920’s kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the mal-distribution of wealth, caused the American economy to capsize† (Hicks, 1960 p. 110). The effects of the Great Depression were many and widespread. Banks were not federally mandated to insure depositors at this time. Therefore when the hundreds of banks suddenly failed, millions of people lost their life savings. Immediately following the bank failures, many factories were forced to close and all types and sizes of businesses dissolved leaving many workers without jobs or money in the bank. Many businesses and financial institutions failed. The businesses that stayed open were barely making enough to remain operational. The tax base fell suddenly which affected local governments, many of which could not continue to conduct some city services at a normal capacity. The price of farm products also fell sharply and the mass foreclosures of family farms soon followed causing bloody clashes between the owners and the bank representatives. Of those who were able to hold on to