The 1920s, otherwise known as the Roaring '20s, was a period of innovation and improvement of the overall life of Americans. Many Americans in this era experienced economic prosperity and a new standard of living as many products such as cars, radios, and telephones were available for everyone. Music such as jazz was discovered and it seemed that nothing could go wrong and that America could keep on prospering. However, it did not go that way.
At the nearing the end of the 1920s, the unthinkable happened. the stock markets crashed and wiped out millions of investors and traders in the process. The cause of the Great Depression was not due to the stock market crash. It was just a symptom or an effect of the Great Depression. What caused the Great Depression was a culmination of events. The production of goods began to decline, the unemployment rates were rising, the consumers were accumulating a lot of debt due to the credit system, and the sheer amount of excess loans the bank could not solve.
Only a year into the depression, 4 million people lost their jobs and were unemployed. Fast forward to 1931 6 million people became unemployed. The country's industrial production dropped by more than 50% and many farmers, who had been affected long before the great depression hit, were forced to leave their crops to rot as they were not able to afford to harvest them. Thousands of banks were forced to close, taking the money of those who were part of the banks with them.
In 1932, there were close to around 15 million people unemployed but when elections rolled around, a new president emerged. Franklin Delano Roosevelt won the election in an overwhelming amount and was determined to bring the economy back up. In his first 100 days in office, he passed legislation in the hopes of stabilizing the economy and agriculture production. He provided jobs and stimulated the recovery of America. He made the Federal Deposit Insurance Corporation protect depositors' accounts and the Securities and Exchange Commission to regulate the stock market and prevent abuses that led to the 1929 stock market crash.
In 1933, the economy began to show signs of recovering, where the GDP was growing at a constant rate of 9% per year. However, it hit another sharp recession caused by the federal government. They wanted to increase the requirements of its money in the reserve, which affected the entire economy. All the work done to was mostly reversed and actually prolonged the depression until the end of the decade. Strangely, the Great Depression of America fully ended when World War II began. When America decided to support Britain and France, they were beginning to mobilize for the war, which produced many jobs and the unemployment rate began to drop to the pre-depression era. The Great Depression ended, but now America had to focus on the greater problem, the next world war.
Sources:
https://www.history.com/topics/great-depression/great-depression-history
https://political-economy.com/causes-of-the-great-depression/
https://www.ncpedia.org/history/20th-Century/1920s
I really liked your concise overview of all the key events to the Great Depression. Looking at some of the lasting effects of the Great Depression, I found that views about it were very mixed. While some people began to distrust banks and refused to borrow credit anymore, others argued that it made the nation stronger. An important law that was passed during this time was the Social Security Act, which allowed for retirement plans, assistance for the handicapped, and unemployment insurance. The WPA, PWA, and CCC (work programs), also greatly contributed by building or repairing infrastructure as well as planting trees. Overall, the Great Depression was able to change the new
ReplyDeletevalues of consumerism and old forms of labor.
Source:
https://www.ducksters.com/history/us_1900s/end_of_the_great_depression.php