Modern World Studies: The Great Depression

The Great Depression

Conditions of the "Great Depression," started out small, but as time goes by it got horrifyingly terrible, until Roosevelt was elected and solved the economic crisis. It all started when the stock market crashed. Stock markets seemed like a guaranteed way to become rich. The majority of Americans, invest in stocks. But in October 29, 1929, everything went south. In October 29, the event called Black Tuesday, was the day when the stock market crashed. Since so many people had invested in their stocks, and the stock crashed, there was a great loss of money. Masses of people stormed stock markets, in their desperate attempt to sell their stocks. The only problem about that is, they can't sell their stocks if no one is going to buy them. With the stock market crashed, the Great Depression had officially begun. With the stock market crashed, it had created an ugly chain of events. Since banks had also invested in large proportions of their client's money in stock market. Banks that did this, are forced to close, causing panic all over the country. Fear ran through the country. People were afraid they are going to lose their savings in the bank, people rushed into banks to withdraw their money. With the massive withdraw, banks eventually go bankrupted. Because of the massive withdraw of money, banks are now in debt. With the bank unable to recover it's client's money, additional banks went bankrupted, alongside the people who did not withdraw their money in time. The chain of events does not stop here, businesses and industry are also greatly affected by it. Having much of their money from the stock market, or the bank, they started to cut worker's wages. Customers refrain from purchasing goods, as the majority of the customers are now poor, leaving the industries, or businesses no choice. They either have to reduce the wages of the workers even further, hugely reduce the price of the goods, or close down. With the reduction of the wages, the bankruptcy, or the closing down of businesses and industries. Workers all over the country are left unemployed. In addition to the stock market crashing, there are other factors that contributed in the Great Depression. For example The Dust Bowl. Farmers are usually safe from depressions, or economic crisis, as for being able to feed themselves. With the constant overproduction in farms, soil in farms had lost it's fertility. Years of overproduction had turn soil into dust, the soil is totally worn out, unusable. Dust storms start to happen, destroying other farms. With many farms unable to produce, or destroyed by the dust storms, food prices spike high, and more workers are added in the unemployed list.

During the Great Depression, President Herbert Hoover was in charge. President Hoover spoke often of optimism. People blamed with for everything that is happening. Shantytowns are called Hoovervilles, as a reference to his name. Hoover Blankets, Hoover wagons, etc. With the inactivity, and the poor decisions made by Hoover, he was easily defeated by Franklin Roosevelt in the following election. America has high hopes and expectations, that President Roosevelt is going to solve all this chaos.

With Franklin Roosevelt now president, many changes were implemented. President Franklin Roosevelt closed all the banks, and only allowed them to reopen once they are stabilized. And the program know as "The New Deal," was established.