The United States Economy During The Great Depression

The “Roaring 20s” was a time of joy and excitement. Despite the prohibition law that banned all alcohol, America was at its peak. The first radio commercial had been broadcasted, Babe Ruth had hit 60 home runs, and almost everybody was dancing the Charleston. Nobody expected that such a “grand” era would lead to one of America’s worst economic downfalls, known as the Great Depression. How could America’s peak lead to such a dreadful economic trough? Most people probably think that the stock market crash of 1929 is the only cause of the Great Depression, but in fact, several factors had contributed to the Great Depression. The Great Depression was caused by speculation and installment buying, international payment problems, and uneven income distribution.

James Tobin had once stated, “The miserable failures of capitalist economies in the Great Depression were root causes of worldwide social and political disasters” (James Tobin Quotes). America has yet to face the dark ages of failing economy when the stock market crashed in the days of October 1929. From a child to a dying old man, everyone’s lifestyles were changed dramatically by the events of this period, the Great Depression. The Great Depression resulted from a combination of both domestic and worldwide conditions. The depression had afflicted every inch it passed by. Every nation, especially the United States, now have to find a way out.

Imagine a drastic occurring in what seems like an instant. This is exactly what happened to many people during the time of the great depression. This time period, which lasted for over ten years, meant no job, possibly no home, and not a lot of food. While the Great Depression didn’t take long to become a worldwide problem, it all started in the United States (“Great Depression”). People had been investing their money into stocks, but in September of 1929, the prices started droping. By October of that same year, the marke”crashed,” and and these stock were worth absolutely nothing (“Great Depression”). Undoubtedly, the econemy had reached its lowest point(“Great Depression”). Despite the fact that the decade of the thirties was marked by the

TThe status of the economy when Roosevelt obtained presidency was characterized as very flawed and impaired. While President Herbert Hoover had relentlessly tried to mend the broken economy after the stock market crash of 1929 by establishing “Hoovervilles” and spending vast amounts of government money, the economy was still extremely damaged and broken.

The US was deep the Great Depression. Business was unstable and people were afraid. Many believed this was more than a Business depression it was a greater depression of the American people. They were losing faith that Democracy could work well for America and restore them to a prosperous way of life. Franklin Roosevelt (FDR) needed to inspire the nation to be brave, fearless and to take action!

It is well known that the Great Depression was one of the most severe crises in American history. This complete collapse of American economy can be attributed to the lack of diverse industries to gain economy from, under consumption from the consumers, and a major credit structure problem. These are some of the reasons for the Great Depression, but even without these causes a collapse was bound to happen.

In American history, the Great Depression ranks second as the longest and most severe crisis ever experienced only dislodged from the first position by the Civil War. The Great Depression marked a period of economic downturn that resulted in severe declines in output, acute deflation, financial insecurity and severe unemployment rates. This was a sharp contrast from the early 1920’s when the country was experiencing a period of tremendous economic growth and prosperity. The Great Depression was brought about by a number of factors that included the declining consumer demand, a natural slowdown in the cycle of business, misguided government policies, panics within the financial markets and environmental disasters among others. Everyone felt the effects of the Great Depression on every part of the country, rural or urban. From the rich to the poor, the young to the old, white Americans to African Americans, no one was spared from the devastating effects of the depression. The experience of millions Americans suffering as a result of the Great Depression paint a clear picture on how serious the crisis was. Many Americans believed that it was the government’s role to alleviate them from the suffering and also offer relief aid to curb hunger and starvation. Letters sent to President Franklin D. Roosevelt and Mrs. Roosevelt with photographs taken by photographers of the Farm Security Administration (FSA) show and tell the social experiences of many Americans during that period.

The Great Depression was the worst economic downturn in the history of industrialized world. People wouldn’t pay back their loans, thus the banks went bankrupt. This happened to over 100 banks and millions of dollars were lost. All of these events lead up to the Stock Market Crash of 1929. The leader of the country during this unfortunate time was Herbert Hoover who did absolutely nothing to support his people, thinking that it wasn’t his place to do so. Americans were furious when they heard about this but they couldn’t do anything to convince the government to help them. Throughout the years, the economic industry in America had gotten worse. From 1929 to 1933, unemployment rates increased by over 10 million and Americans struggled to survive. It wasn’t until America elected a new president, Franklin Roosevelt who created the New Deal in 1935, where the economy was recovering. The New Deal was a group of U.S government programs of the 1930s.

When we look back through history we can find many opportunities to learn the lessons of economic theory but The Great Depression is a particularly relevant historical event when discussing economics. It is a defining event in the history of America as politics and economics intertwined, transforming the role of the federal government in the economy. Due to the length, severity and global effects an entire decade is known as the Great Depression. Theories continue to be debated on how or why the Depression took place and the reasons for its eventual end however, what most will agree on is that “The Great Depression (1929-39) was the deepest and longest-lasting economic downturn in the history of the Western industrialized world” (History.com Staff, 2009).

The Great Depression was one of the most disastrous events that negatively impacted America’s economy, and was triggered by the crash of the stock market. One long term cause of the Great Depression would be the Dust Bowl. The Dust Bowl caused the prices of many foods to decrease in price rapidly, and farmers had to give up their jobs due to the dust storm. This was one of the causes of the Great Depression because it made farmers unemployed and deprived of money. Another cause would be the banks because no one trusted the banks and did not lend them any money. Since people did not loan money to the bank, the banks in turn was not able to loan others money when they were in need of direct relief, causing many to become unable to support themselves. Herbert Hoover was elected in 1928, beating Al Smith in the election. Three things he believed in was that the economy had natural cycles, how he believed in a theory of rugged individualism, and had a wait and see approach. Therefore, he believed that the economy would eventually fix itself back to its original state before the depression, but that was an unrealistic approach. Hoover also believed in rugged individualism, so he did not create any programs to give direct relief to the citizens who needed help. In the end, Hoover prolonged the Depression by not acting quickly and not providing help to others, especially the unemployed. FDR got elected in 1932, and he on the other hand, acted quickly to restore public confidence. He

The Great Depression has been labeled as the worst economic depression in the United States History. “On September 3, 1929, the Dow Jones was at a high of 381 points, and on October 29, 1929, it had fallen to 41 points after a week of panic selling.” http://thegreatdepressioncauses.com/causes/. Things started to become unstable as many people were getting rid of their stock. Banks were so confident in the stock market and because of that, they gambled the consumer’s funds in their bank accounts and invested these funds into the stock market. “Seeing a few banks close caused another panic across the country. Afraid they

The economic downturn is considered the great depression from 1929-1941 because of the uncontrolled exertion on unlimited goods produced. Other contributions were the risky and irresponsible speculations in the stock market. Banks had invested and lost, and they were buying on margin. There was also increasingly unequal distribution of wealth. Furthermore, the U.S had weak banking systems and banks eventually failed. Finally, there was a protectionism in tariff policy. Tariffs are taxed on goods that other countries paid to trade. This is also viewed as the great depression because it was not just only U.S crisis it was a global crisis. Farmers were hit hard, lost land and could not pay their mortgages. This was the longest depression ever in U.S history that had affect tens of millions of people including businesses, farmers, the wealthy and the middle class. It was estimated that 13-15 million Americans lost their jobs, unemployment hit 25%, and 5,000 banks closed. World War 2 was significantly costly, which also had an effect on the great depression. The manufacture of materials for war such as rifles, ships, tanks and other items cost the federal government millions of the dollars which worried Americans again. Lastly, governments were destabilized everywhere.

The America in the 1930s was drastically different from the luxurious 1920s. The stock market had crashed to an all time low, unemployment was the highest the country had ever seen, and all American citizens were affected by it in some way or another. Franklin Delano Roosevelt’s New Deal was effective in addressing the issues of The Great Depression in the sense that it provided immediate relief to US citizens by lowering unemployment, increasing trust in the banks, getting Americans out of debt, and preventing future economic crisis from taking place through reform. Despite these efforts The New Deal failed to end the depression. In order for America to get out of this economic

During the Great Depression, jobs were hard to find because the bosses of the company were firing, not hiring people to save money. Businesses were closing during this period, which meant more Americans were jobless and looking for work. Most families had to restrict to only using one light at a time in their home to reserve electricity and keep the bill as low as possible. About every one out four citizens had a family with no full-time breadwinner. Three years later after Black Thursday, people wanted a change, which lead to President Franklin Roosevelt being elected and helping to solve the problem at hand.

This paper will present a brief summary and discussion of the causes of the Great Depression based on Frank Stricker 's paper, "Causes of the Great Depression: or What Reagan doesn 't know about the 1920s." Stricker presents an argument as to what he believes to be the root causes of the Great Depression as they relate to the decade preceding the stock market crash of 1929. This review is intended for undergraduate and graduate students of U.S. American History. Stricker present 's several essential points in his paper. The capitalist form of economy, by its nature, has an insatiable appetite for ever-increasing profits. During the 1920 's profits were high, yet income distribution was unequal (95). The only real benefactors were