The Cause and Effects of the Great Depression Essay
1443 WordsJan 17th, 20116 Pages
Many people speculate that the stock market crash of 1929 was the main cause of The Great Depression. In fact, The Great Depression was caused by a series of factors, and the effects of the depression were felt for many years after the stock market crash of 1929. By looking at the stock market crash of 1929, bank failures, reduction of purchasing, American economic policy with Europe, and drought conditions, it becomes apparent that The Great Depression was caused by more than just the stock market crash. The effects were detrimental beyond the financial crisis experienced during this time period. The first and most obvious known factor in the development of The Great Depression is the stock market crash of 1929. The Money Alert website…show more content…
The banking industry as a whole after the stock market crashed was going bankrupt due to not being able to carry the “bad debt” that was created from using customer money to buy stock. Because the banks were out of money, they were unable to cover customer withdrawals from their bank, causing many bank customers to lose all of their savings. With the uncertainty of the future of the banking industry, many people withdrew all of their savings, which caused more than 9,000 banks to close their doors and go out of business (Kelly). Due to the effects of the Great Depression, and the collapse of the banking industry, the government created regulations to prevent similar failure in the future. For Example, the SEC, (or Securities Exchange Commission), which regulates the sell and trade of stocks, bonds and other investments was created as a result of The Great Depression. The FDIC (or Federal Deposit Insurance Corporation), was created to insure bank accounts so that that the consumer would be protected if the bank were to go out of business (Kelly). The Great Depression's effect on the banking industry led to many useful changes to the banking industry and helped restore confidence in banks in the American people. The next major factor that contributed to the Great Depression was the reduction of goods being purchased during the time period. After the stock market crashed, consumers from
All the sources that contain information about the Great Depression claim that it was the most dynamic, deepest, and longest depression. In most countries it began in 1929 and lasted until 1939. It was the most uncompromising Depression. Economic slump in North America ruined multiple lives, destroyed families and individuals.
Any essay of the Great Depression would be full of tragic facts. This one will reveal some historic true. Maybe you need some help to write a paper on this topic, or, for example, your teacher asked you to write a narrative essay about life, contact us so we will assist you.
The impact of the Great Depression on society was huge. It affected people from coast to coast, the young and the old, both rich and poor countries. For the greater number of people economic crisis became permanent reality. The Great Depression started with the Stock Market Crash in 1929. History called it Black Thursday because it happened on October 24 which was Thursday. The birth of the crash gave the start to ten-year Depression.
Although many people say that the Great Depression started with the Wall Street Crash, some insist that the Depression happened not because of that bang. The economic conditions of the United States were less than satisfactory. The agricultural sector suffered greatly. Several facts explain it plainly: American farms had to expand because of the World War I to provide food for all soldiers; the second reason is that farmers mechanized their operations since the growth of work’s volume. Tractors were expensive, so farmers were into debt to finance their expansions.
One more point of view says that the Great Depression was caused by overproduction. Unsold goods piled up because people did not consume all that was produced. All these are different views, and you pick the one you like most. The facts and factors which are written above explain clearly why the Great Depression took place in the history. It happened. Nobody can change it.
Some experts call the period before the Depression (1920s) the period of prosperity. That was the age of jazz and the days of first Miss America elections, and first Oskar ceremony. People got electric washing machines, electric refrigerators, and record players. In 1937 people started watch sound movies. Even though everything looked like a new age, people faced Depression.
Money takes an important place in one’s life. People used it not carefully during the time before the Depression. Essay about money analyzes this issue clearly. This is a good question to ponder.
Once John D.Rockfeller said that depression makes people discouraged, but it is the matter that once appears and then goes away; prosperity always comes back. Despite his words, the Wall Street was swept by panic. Each bank closed its doors. Factories began to slow down productions. An abundance number of workers were fired. Those people who were employed got small wages. Crowds of people were gathering at the Wall Street and outside the banks that failed.
The unemployment rate was super high. People stood in soup lines outside soup-kitchens. Many fired workers were wandering about the country to find any job. Some people moved from the cities to countryside. Thus, they were able to feed their families. Both the working and middle class suffered from unemployment. People were looking for new places to work. Poverty snaked into homes. This topic is rather touching. More about this theme read in poverty essay.
Many farmers lost their farms. A lot of them were evicted. Some farmers rented their land or owned land, but could not keep up the payments. It was hard time. Imagine the situation when you have no place to go. Farmers destroyed their crops. They could not afford to take it to the market for the price they got there. People stayed without food and cloth.
Some kind of agitation took place in the country. One could see shocking scenes. Strikes and demonstrations were going on. There were picket lines. When people went on strike the police opened fire on them. Communist party was leading a struggle on workers behalf. This matter during that time made people believe that it was the only organization that was doing something about Depression.
A sort of relief brought Franklin D. Roosevelt. He became the president and a central figure of the Great Depression events. Roosevelt himself was rich, and he knew not much about lives of the poor. His wife Eleanor went to poor districts and knew how people lived. She saw the conditions of the poor. For these reasons, the understanding how people suffer came to Roosevelt through his wife. Some say that Eleanor was his eyes and ears. People were waiting for Roosevelt to do something during that severe time. This aspect is vital. Any essay about The Great Depression should mention it.
In 1932 Franklin D. Roosevelt for the first time pronounced words New Deal. Roosevelt promised to curb the dynamic effects of 1929’s crash. His New Deal was in response to the Great Depression. Franklin D. Roosevelt focused on the relief for poor and unemployed, recovery of the economy, and reform of the financial system. Even though many politicians were critical for Roosevelt’s New Deal, it made a significant shift in American politics and domestic policy. The New Deal caused the beginning of numerous social programs.
The Great Depression started in the USA but affected many countries. Australia was dependent on agricultural export as well as on industrial. Falling export caused unemployment which reached 29% in 1932. The wages were pressed by increased product prices. Despite all the hardships, gradual recovery started after 1932.
Canada was harshly affected by Depression. The industrial production fall to 58%, and unemployment reached 27% in 1933.
The Depression hit France only in 1931. Its impact was not severe. The unemployment rated no more than 5%. There was no banking crisis in France. The fall in commodity was at 20%.
The Great Depression almost did not influence China but greatly affected Greece in 1932. All attempts of the Bank of Greece to overcome the Depression failed. However, the Greek government managed to strengthen economy of the country up to the Second World War.
The economy of Latin America was highly invested by the USA. The Depression crashed it harshly. Latin America was a big product exporter to the world. It developed its economy by British and USA investments. Thus, its export industry suffered immediately and greatly. The New Deal’s example in the USA served the basis for making steps toward improved life in Latin America.
Those people who remember the time of Depression say that it was a hard time for everybody, and everyone had to compete with others.