I will pay for the following article Causes of the Great Depression. The work is to be 5 pages with three to five sources, with in-text citations and a reference page. Dividends started rising and these were paid to the top 5% of the income earners which contributed to the unequal income (Amatecon, 2007). In the corporate sector, just 200 companies controlled almost half the corporate wealth (Gusmorino). While the automotive industry was thriving, agriculture in the US was in bad shape. While For Motors reported assets worth $345million, food surplus caused the prices to drop by 72 percent. The federal government favored new industries opposed to agriculture which also contributed to the unequal distribution of wealth.
Stock market crash
October 29, 1920, is referred to as Black Tuesday was the day that the stock market had crashed in the US. Over a two-day period, the market lost 24% of its value (Croft Communications). In 1920 when the stock market had started soaring people borrowed money and started investing in stocks to take advantage of the boom. During this 9-year period stocks more than quadrupled in value which was fueled by rampant speculation. Company’s earnings were of little interest as long as the stock prices could bring huge profits to the speculators (Gusmorino). People could buy stocks without the money to purchase them which brought in many first-time traders in stocks. It was like buying a car on credit and this drove the markets to absurdly high levels. As stock market trading soared, by mid-1929, outstanding brokers’ loan was over $7bn. Interest on brokers. loans went up to as high as 20 percent. Suddenly the prices started to fall on October 21, 1929, and by the end of Tuesday, the market had crashed. Hence it was basically over-trading and an artificially created boom that led to the crash. Within two months of the crash, stockbrokers had lost more than $40bn. Even though losses started recovering by the end of 1930, it was not sufficient and American had entered the Great Depression as the economy had become unstable.
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