Great Depression Essay

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The Great Depression1

The Great Depression:
The World's Farthest Economic Decline

Anthony Canuto

US History 2

The Great Depression2

The Great Depression:
The World's Farthest Economic Decline
The Great Depression originated in America and spread to all nations when the stock market crashed in 1929, following World War II. It lasted until the early 1940's, about 12 years. On September 2, 1929, stock prices began to drop greatly, and on October 9,1929, the Wall Street Crash of 1929 occurred, also known as 'Black Tuesday'. Every industrialized country was affected by this. 11,000 of the 25,000 US banks had failed by 1933, leading to a very greatly reduced spending and demand; causing reduced production. Unemployment rates in America rose up to 25% (12-15 million workers), and up to 33% in other countries. World trade was cut in half. Theodore Roosevelt said, "Now let's be frank. You and I know that immediate relief of the unemployed is the immediate need of the hour." (Sources: About the Great Depression, American History 102 the Civil War to the Present) The Crash of the Stock Market:
Black Tuesday
Economist in the 1920's predicted the fluctuation in stock market prices was temporary and would recover. Irving Fisher, a Yale university economist proclaimed, “The nation is marching along a permanently high plateau of prosperity.” five days before the start of the Great Depression. The economists were in denial about the actuality of the price fluctuation, refusing to admit that stock prices were completely out of proportion to actual profits. Nobody was really worried about the rapidly falling sales of goods and services and rising stock prices, expecting issues to correct themselves. To keep the market afloat, financiers such as J.P. Morgan bought up all the stock to ease the panic amongst the people, stabilizing the market until Monday, October 28 when stockholders began to frantically sell their stocks again. The next day was the most devastating stock market crash the New York Stock
The Great Depression3

Exchange has ever witnessed. Stock prices collapsed to their lowest amount, wiping out all financial gains from the previous year, more than $30 billion disappeared from the American economy, the same amount the United States Government spent on World War I. Americans were still optimistic about the economy turning around. J.D. Rockefeller stated, "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again." (Source: American History 102 the Civil War to the Present, Absolute Astronomy)
"This country is not in good condition." declared former President Coolidge. Rather than calling this crisis a “Panic”, like the previous economic downturns, President Hoover called it a “Depression”, to keep the people from being alarmed. America wasn't the only country to have a suffering economy, France, Britain, and Germany also suffered immensely. Germany suffered the most, because they had borrowed money from the United States during the war and weren't able to pay it back, thrusting them into debt and causing huge inflation on their economy. (Source: American History 102 the Civil War to the Present)

The collapse of banks and major loss of work caused hardships and tension for many people of every social class. Suicide rates increased drastically, especially among investors. In New York City, homeless camps lined the streets. Graduates could not find work and settled for work they were overqualified for and took less pay. In Germany, six million people were unemployed, and a 22% unemployment rate took place in Britain. Families were torn apart when men could not provide basic necessities, and the women were working; causing a reversal to the standard family role. Although, it created new opportunities for women in the workforce. These hardships lasted for a very long time for many, but by 1937 the recession was