The Great Depression Essay

Submitted By bigkidnow
Words: 463
Pages: 2

As the “Roaring Twenties” were coming to an end, people continued to assume that the market would continue to rise indefinitely, due to the recent wealth and success of many during the past decade. America was devastated the day they were proven significantly wrong. Come October 24th of 1929, the stock market took a fall for the worst. Stock prices dropped, and the poor and rich lost almost everything in the crash. The great depression brought about both positive and negative effects. Although the depression caused a significant unemployment rate drop and the closing of over 9,000 banks nationwide, it did create the welfare and social programs we use today. The main cause of the depression was Black Tuesday. Overnight, hundreds of thousands of customers began to withdraw their deposits on this day. With no money to lend and loans going sour as businesses and farmers started to fail, the American banking crisis deepened. Those failures resulted in the state deposit insurance programs ending. The failed banks were primarily small, rural banks, and people in metropolitan areas were generally unconcerned. Most investors and businessmen concluded that these banks were weak and poorly managed, and cause their failure. These failures did end up strengthening our current banking system. Unemployment was one of the most memorable effects of the great depression. The unemployment rate rose from 3% in 1929 to 25% by 1933. The market became so bad that companies were forced to lay thousands of employees off. Companies across the nation were downsizing left and right, increasing the unemployment rate. It affected millions of families that were forced to turn to welfare checks as a main source of income. Although the depression was always known for the tremendous…