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mr_godi [17]
3 years ago
11

How did the U.S. Stock market contribute to economic instability before the Great Depression?

History
2 answers:
xenn [34]3 years ago
5 0
The stock market crashed right before the Great Depression, causing many to lose money in the process.
Nookie1986 [14]3 years ago
4 0

The Great Depression of the 1930s was the largest recession in history and its causes were overproduction of goods and the expansion of unbridled credit by banks.

The American economy was experiencing a period of euphoria during the 1920s. The US had become the world's leading economic powerhouse and was the largest supplier of manufactures to Europe.

The situation began to change in the late 1920s. Rebuilt from World War I, European nations drastically reduced imports of industrialized and agricultural products from the United States. As exports to Europe declined, domestic demand was not sufficient to dispose of all corporate output and product inventories increased. Most of these companies had shares in the New York Stock Exchange and millions of Americans had investments in these shares.

In October 1929, realizing the devaluation of the shares of many companies, there was a rush of investors intending to sell their shares. The effect was devastating as the stock depreciated sharply in a few days. Very wealthy people moved overnight to the poor class. The number of business failures was huge and unemployment reached almost 30% of workers. Thus the US plunges into the biggest economic crisis in its history, the Great Depression.

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Following the declaration of secession by South Carolina on December 20, 1860, its authorities demanded that the U.S. Army abandon its facilities in Charleston Harbor. On December 26, Major Robert Anderson of the U.S. Army surreptitiously moved his small command from the vulnerable Fort Moultrie on Sullivan's Island to Fort Sumter, a substantial fortress built on an island controlling the entrance of Charleston Harbor. An attempt by U.S. President James Buchanan to reinforce and resupply Anderson using the unarmed merchant ship Star of the West failed when it was fired upon by shore batteries on January 9, 1861. South Carolina authorities then seized all Federal property in the Charleston area except for Fort Sumter.

During the early months of 1861, the situation around Fort Sumter increasingly began to resemble a siege. In March, Brigadier General P. G. T. Beauregard, the first general officer of the newly formed Confederate States Army, was placed in command of Confederate forces in Charleston. Beauregard energetically directed the strengthening of batteries around Charleston harbor aimed at Fort Sumter. Conditions in the fort deteriorated due to shortages of men, food, and supplies as the Union soldiers rushed to complete the installation of additional guns.

The resupply of Fort Sumter became the first crisis of the administration of the newly inaugurated U.S. President Abraham Lincoln following his victory in the election of November 6, 1860. He notified the Governor of South Carolina, Francis W. Pickens, that he was sending supply ships, which resulted in an ultimatum from the Confederate government for the immediate evacuation of Fort Sumter, which Major Anderson refused. Beginning at 4:30 a.m. on April 12, the Confederates bombarded the fort from artillery batteries surrounding the harbor. Although the Union garrison returned fire, they were significantly outgunned and, after 34 hours, Major Anderson agreed to evacuate. There were no deaths on either side as a direct result of this engagement, although a gun explosion during the surrender ceremonies on April 14 caused the death of two U.S. Army soldiers.

Following the battle, there was widespread support from both North and South for further military action. Lincoln's immediate call for 75,000 volunteers to suppress the rebellion resulted in an additional four Southern states also declaring their secession and joining the Confederacy. The battle is usually recognized as the first battle that opened the American Civil War.

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