Causes And Effect Of The Depression Essay

2455 Words Mar 21st, 2015 10 Pages
Causes of the Depression

Public confidence was generally high in Canada during the last years of the 1920s, and many Canadians were optimistic. However, the uncertain prosperity of the Roaring Twenties was coming to an end. A dramatic signal of the approaching end took place in October 1929. On October 24, thousands of speculators lost money in a sudden stock market tumble on the Winnipeg Grain Exchange. Five days later, the New York stock market crashed. Too many people had bought stocks using borrowed money. As long as stock prices were rising, speculators could sell their stocks, pay off their debts, and still make a profit. But when stock prices began to fall, they could not cover their debts by selling off stocks. A drop in stock market prices set triggered a panic wave of selling as thousands of speculators rushed rid themselves their stock shares before prices dropped even lower. But there were fewer buyers, and prices continued to plunge. Thousands of people saw their stocks become worthless almost overnight. It was an early warning sign of the start of the Great Depression, an economic crisis of unprecedented magnitude and length.

Canada was not the only nation to suffer during the Great Depression. The Depression was a worldwide economic disaster that affected countries as far as Germany, Norway, Chile, Japan, and the United Stats. It is not surprising that an event as devastating and complicated as the Great Depression had many causes and they were related to…

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