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By far, the most significant event or development of 1929, and the reason that year continues to be important, was the start of the Great Depression.

On October 28, 1929, the stock market crashed. Thousands of people lost everything. The Great Depression, as it came to be known, had a...

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By far, the most significant event or development of 1929, and the reason that year continues to be important, was the start of the Great Depression.

On October 28, 1929, the stock market crashed. Thousands of people lost everything. The Great Depression, as it came to be known, had a number of underlying causes, and those causes continue to be highly relevant today. Among the major causes for the market's crash was the extraordinarily high levels of debts sustained by individuals and businesses alike. Banks were providing credit at unrealistic and unsustainable levels, which lead to levels of debt that dragged down the nation's economy. Many people used the loans they took out to invest in stocks, thereby ensuring that markets would be built upon a foundation of debt. In addition, the notion of "buying on the margin," or making down payments on stock purchases, further undermined the integrity of the markets, which will eventually experience declines no matter how strong an economy, with those declines representing losses that proved unsustainable for those who borrowed heavily to finance stock purchases. Also contributing to the stock market crash was the cultural atmosphere that identified the decade of the 1920s as "the Roaring Twenties." Confidence in the future was so high that most Americans couldn't comprehend or imagine a downturn, which was certain given the fragility of the banking system that sat at the center of this exuberance. The result of these trends, including the decline in the nation's agricultural sector, was the crash of October 28. Once the stock markets crashed, the structural weaknesses of the banking system were exposed with the resulting failure of thousands of banks across the country. With the banks' failures, credit dried up, and loans became impossible to attain--at least loans from "reputable" sources.

The Great Depression would last for ten years, during which time millions of Americans were unemployed, with tens of millions more overseas. Further exacerbating economic conditions were the protectionist sentiments that took hold courtesy of the fears endemic among the population amidst such high unemployment and economic ruin. At the political level, these fears compelled short-sighted members of Congress to pass the Smoot-Hawley Tariff Act of 1930, which imposed draconian taxes on foreign imports, causing retaliatory measures by U.S. trade partners in Europe. The closing off of international trade represented a catastrophic reaction to economic problems that served only to make matters worse for everybody, as high tariffs on imports meant that foreign countries would impose similar taxes on American exports, which supported what few jobs remained available.

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1929 was a very important year. It was in October 1929 that the stock market crashed. This ended a decade of unprecedented prosperity in our country. This was the year all the warning signs that had been ignored caught up with the American people.

People ignored the reasons why the stock market continued to rise, and why that growth was unsustainable. By 1929, there weren’t too many new investors who could enter the stock market. Thus, the stocks, which were overvalued anyways, were bound to fall in price. People who bought stocks on credit placed themselves in a vulnerable position. When margin calls were made, investors panicked and lost their investment.

As a result, 1929 was the year the Great Depression began. Millions of Americans lost their jobs. Many Americans lost their life savings in the stock market or in banks that failed. People lost their homes, and farmers lost their farms. 1929 will be remembered as the year that the great party of the 1920s ended and the Great Depression of the 1930s began.

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