The Great Depression: A Loss to Gain

The Great Depression: A Loss to Gain

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The Great Depression

The Great Depression happened from 1929 and lasted until 1939. It began right after the stock market crash of 1929. It was ten years of the American government in an absolute crisis. It was the deepest and longest-lasting downfall of an economic system.

Years after the stock market crash, consumer spending and investments dropped causing a decline in industrial output. Companies failed and were forced to lay off workers. Unemployment levels dangerously dropped and more and more people were left without a job. In the fall of 1930, the first of four waves of banking panics began, as large numbers of investors lost confidence in their banks and demanded deposits in cash, forcing banks to use loans in order to pay their insufficient cash funds. By 1933 almost 15 million people were unemployed causing a struggle for food, shelter, and other necessities. By then almost half of the country’s banks failed and lost all money taken in by the banks. Bread lines, soup kitchens and rising numbers of homeless people became more and more common in America’s towns and cities.

Farmers couldn’t afford to harvest their crops, and were forced to leave them rotting in the fields while people elsewhere starved. The Great Depression was a never ending threat until Franklin D. Roosevelt was made president. FDR released a wave of actions to counter act the suffering economy of the US, called the New Deal Plan. During Roosevelt’s first 100 days in office, his administration passed acts that aimed to stabilize industrial and agricultural production, create jobs and stimulate recovery.

He also looked to reform the financial system, creating the Federal Deposit Insurance Corporation (FDIC) to protect depositors’ accounts and the Securities and Exchange Commission (SEC) to regulate the stock market and prevent abuses of the kind that led to the 1929 crash. Employment rose and the banks started to gain trust back with the people and starvation was lessening. Other acts were created to restore the economy’s injury but it wasn’t until World War II that the economy stabilized. The Great Depression brought forth an epiphany in Government, State, Federal, and individual spending. The Great Depression was a lesson for the whole country.

Many people see investors and banks as the reason for the Great depression but who or what do you think was the culprit?

https://history.state.gov/milestones/1899-1913/roosevelt-and-monroe-doctrine

FDIC placard from when the deposit insurance l...
FDIC placard from when the deposit insurance limit was $2,500. (Photo credit: Wikipedia)