ipl-logo

The Great Depression Essay

1141 Words5 Pages
bulb-icon

Recommended: The new deal after the great depression

The Great Depression started with the stock market crash of 1929. “In 1925, the total value of the NEW YORK STOCK EXCHANGE was $27 billion. By September 1929, that figure skyrocketed to $87 billion” (The Market Crashes 1). Stocks were being sold for way more than their reasonable value and that couldn’t go on indefinitely. Although more people in the U.S.owned stock than ever before, “90% of American households owned precisely zero shares of stock” (Sinking Deeper and Deeper 1). This stock frenzy was fueled by the practice of buying stocks on margin (The Market Crashes 1). This meant that the person was borrowing the majority of the money, up to 75%, used to purchase the stock. Lenders were happy to make these loans because the stock market …show more content…

didn’t have a social safety net like we do today. There was no unemployment insurance, if you lost your job you were out of luck. Even the 90% of the country that had not invested in the stock market were affected. Their savings could be wiped out if the bank they put it in failed (Sinking Deeper and Deeper 1). If they lost their job, and the unemployment rate was 25% by 1932 (Sinking Deeper and Deeper 1), there was no unemployment insurance. With unemployment that high, there was very little chance people would find another job. Many people kept their jobs by settling for lower wages, feeling that any money was better than none. Local governments had trouble paying their bills because so many people couldn’t pay their property taxes, this often meant schools were under-funded, under-staffed, or shut down completely (Social and Cultural Effects of the Depression 1). Unemployment got so bad that “Mexican Americans in California were offered free one-way trips back to Mexico to decrease job competition in the state” (Sinking Deeper and Deeper …show more content…

Herbert Hoover, the Republican president when the Great Depression started, didn’t believe government should play a large role in the economy and believed the government’s budget should always be balanced. During the depression tax revenues were way down so instead of investing money in infrastructure projects to put people to work, Hoover raised taxes. This just took more money out of the economy and was a disaster. “Finally in 1932 Hoover signed legislation creating the Reconstruction Finance Corporation. This act allocated a half billion dollars for loans to banks, corporations, and state governments. Public works projects such as the GOLDEN GATE BRIDGE and the Los Angeles Aqueduct were built as a result of this plan” (Hoover’s Last Stand 1). It was a good start but too little, too late. The Roosevelt administration believed that government spending could help pull the country out of the depression. It also believed that there needed to be regulations in place so a crash like the stock market crash of 1929 couldn’t happen again. Roosevelt’s plan, called the New Deal, could be summed up in 3 words: relief (helping the unemployed), recovery (using federal money for job creation and infrastructure building) and reform (putting social welfare programs in place) (The New Deal, Period 7

Show More
Related
573 Words | 3 Pages

The context of the Great Depression is WW1. The Great War was fought in Europe leaving the U.S. economy untouched. This allowed the U.S. to become a trading giant as they began to mass-produce everything. After evaluating and weighing the evidence of bad banking and stock markets arguments is the cause of the Great Depression. The Great Depression started overgrowing it´s been caused due to bad banking.

Read More
585 Words | 3 Pages

The context of the Great Depression is the roaring twenties. At the end of world war one, a new era of prosperity came to America. At the heights of prosperity, the stock market exchange began to rapidly expand as more people began to trade. The Great Depression was caused by installment buying and the crash of the stock market. The first reason the Great Depression happened is that people were buying more than they can afford which is called installment buying.

Read More
468 Words | 2 Pages

Everybody wanted to be part of it. Not till October 1929 when the stock market crashed. As more people invested in the stock market they hope to make a quick profit on a speculative rise in stocks (doc 5). According to doc 5 “stock prices were forced up by competitive bidding rather than by any fundamental improvement in business”. This meant people would invest in a company and when the company rises they would sell for profit.

Read More
1483 Words | 6 Pages

The people who were lucky enough to keep the job they had were paid much less than they were before. More and more people were becoming homeless, and some were struggling to support their family. President Franklin D. Roosevelt put reform and relief measures into place,

Read More
564 Words | 3 Pages

The wealth during the 1920s left Americans unprepared for the economic depression they would face in the 1930s. The Great Depression occurred because of overproduction by farmers and factories, consumption of goods decreased, uneven distribution of wealth, and overexpansion of credit. Hoover was president when the depression first began, and he maintained the government’s laissez-faire attitude in the economy. However, after the election of FDR in 1932, his many alphabet soup programs in his first one hundred days in office addressed the nation’s need for change.

Read More
653 Words | 3 Pages

The Great Depression was a severe worldwide economic depression that took place during the 1930s. The article by Edwin Gay and pictures compiled by Cary Nelson are both descriptions of how the Great Depression was and the several impacts that it had on the American economy. The range of the great depression is unprecedentedly wide according to Edwin Gay. The great depression was believed to have started from the collapse of the US stock market in 1929. This was shown in a picture as compiled by Cary Nelson

Read More
758 Words | 4 Pages

The Great Depression was an enormous economic downfall in the history of the United States and was also a very hard time for many Americans. People had lost jobs, markets went bad, banks had shut down, and unemployment rate has gone up. It had lasted from 1929-1939. During the next several years, buyer spending and investment had dropped, causing a decline in industrial output and raising the unemployment level. It began with the stock market crash on October 29 1929, which had lost millions of investors, markets had lost $30 billion dollars in two days, making it ten times more than the annual budget the U.S had spent for WWI, and prices were dropping until the end of November.

Read More
1159 Words | 5 Pages

Imagine it's October 28, 1929, living a lavish lifestyle, owning a mansion, sailing on a 100 foot yacht every weekend, and having what seems like unlimited money that can be spent on anything at anytime. Then, all of a sudden, October 29, 1929 comes. The stock market crashes, banks are closing everywhere, and personal possessions are being foreclosed upon. The greatest economic downfall in the history of the United States has just began. This would become known as the Great Depression, which suited the time period between 1929 and 1941 perfectly.

Read More
1279 Words | 6 Pages

The Great Depression was a devastating period in United States History, the economy collapsed, and a staggering 25% of the population was unemployed. During this time, there were large wage disparity gaps that were very prevalent, there was no middle class, you were either wealthy or you were poor. It was hard for family life to continue, parents had to take up two and three jobs to make sure their kids were staying safe, and well. Most of these jobs were odd-jobs, and were temporary with no sense of security. It was a struggle to find work, and no job was too demeaning for you to do, because you may not find work again.

Read More
1002 Words | 5 Pages

The Great Depression started in 1929 when the stock market crashed. The banks didn’t have enough money to give. President Hoover was a bad president and then when FDR took over he wanted to change it. Hoover did one thing by making the Hoover Dam and saving money by making water into electricity. The Great Depression was the worst bankruptcy in America's history.

Read More
810 Words | 4 Pages

What had people gone through in the Great Depression? During the Great Depression, many people had suffered. It had brought the whole economy down and many people lost hope. At this time the Great Depression had affected many people, which had in turn impacted other people and companies. With a lack of money people were fun activities were cut to a minimum, and many were left homeless and some took their lives.

Read More
502 Words | 3 Pages

The Great Depression The Great Depression was by far one of the worst times of America’s history, and the world’s history. The Depression affected everyone except for the politicians and the wealthy. During the depression a lot of people lost their jobs which caused the unemployment rate to sky rocket to 14% of America’s population was unemployed, and the number would stay their till World War 2, and the depression started in the 1920’s. Middle class workers were hit the hardest in the depression. Most of the middle class citizens lost their jobs.

Read More
1645 Words | 7 Pages

President Herbert Hoover made efforts to try to fix the great depression. Many people disliked him as a president and complained he didn’t even care. However he at least tired to help people recover from the great depression. Some policies he created were the Hoover Moratorium, the Federal Home Loan Bank Act of 1932, and the Great New Deal. Hoover created the Hoover Moratorium to end the war debts however it didn’t help with the economic crisis.

Read More
585 Words | 3 Pages

During the Great Depression the unemployment rate went up, they were forced to eat at soup kitchens or go through garbage cans for food, and they even had to build shelter out of cardboard. The first underlying cause of the Great Depression was underconsumption and overproduction. Many things contributed to the underconsumption of goods. The production line kept producing goods even when people could not afford to buy them.

Read More
726 Words | 3 Pages

The majority of people made under 2,000 dollars a year (Document 9) which was considered the bare minimum to live off of, the buy all of the basic essentials. These people didn’t have any money to spend on luxury items and couldn’t buy on credit. During this time, some companies priced their goods at a higher price than the majority of people made in a year, like boats that were priced anywhere from 10,000 dollars to 35,000 dollars (Document 8). With nobody to buy from them, these businesses were left without a profit and began going bankrupt. An average family before the depression with two people working full time jobs only made around twenty dollars a week (Document 7).

Read More

More about The Great Depression Essay

Related Topics

Open Document