Essay On Causes Of The Great Depression
All the sources that contain information about the Great Depression claim that it was the most dynamic, deepest, and longest depression. In most countries it began in 1929 and lasted until 1939. It was the most uncompromising Depression. Economic slump in North America ruined multiple lives, destroyed families and individuals.
Any essay of the Great Depression would be full of tragic facts. This one will reveal some historic true. Maybe you need some help to write a paper on this topic, or, for example, your teacher asked you to write a narrative essay about life, contact us so we will assist you.
The impact of the Great Depression on society was huge. It affected people from coast to coast, the young and the old, both rich and poor countries. For the greater number of people economic crisis became permanent reality. The Great Depression started with the Stock Market Crash in 1929. History called it Black Thursday because it happened on October 24 which was Thursday. The birth of the crash gave the start to ten-year Depression.
Although many people say that the Great Depression started with the Wall Street Crash, some insist that the Depression happened not because of that bang. The economic conditions of the United States were less than satisfactory. The agricultural sector suffered greatly. Several facts explain it plainly: American farms had to expand because of the World War I to provide food for all soldiers; the second reason is that farmers mechanized their operations since the growth of work’s volume. Tractors were expensive, so farmers were into debt to finance their expansions.
One more point of view says that the Great Depression was caused by overproduction. Unsold goods piled up because people did not consume all that was produced. All these are different views, and you pick the one you like most. The facts and factors which are written above explain clearly why the Great Depression took place in the history. It happened. Nobody can change it.
Some experts call the period before the Depression (1920s) the period of prosperity. That was the age of jazz and the days of first Miss America elections, and first Oskar ceremony. People got electric washing machines, electric refrigerators, and record players. In 1937 people started watch sound movies. Even though everything looked like a new age, people faced Depression.
Money takes an important place in one’s life. People used it not carefully during the time before the Depression. Essay about money analyzes this issue clearly. This is a good question to ponder.
Once John D.Rockfeller said that depression makes people discouraged, but it is the matter that once appears and then goes away; prosperity always comes back. Despite his words, the Wall Street was swept by panic. Each bank closed its doors. Factories began to slow down productions. An abundance number of workers were fired. Those people who were employed got small wages. Crowds of people were gathering at the Wall Street and outside the banks that failed.
The unemployment rate was super high. People stood in soup lines outside soup-kitchens. Many fired workers were wandering about the country to find any job. Some people moved from the cities to countryside. Thus, they were able to feed their families. Both the working and middle class suffered from unemployment. People were looking for new places to work. Poverty snaked into homes. This topic is rather touching. More about this theme read in poverty essay.
Many farmers lost their farms. A lot of them were evicted. Some farmers rented their land or owned land, but could not keep up the payments. It was hard time. Imagine the situation when you have no place to go. Farmers destroyed their crops. They could not afford to take it to the market for the price they got there. People stayed without food and cloth.
Some kind of agitation took place in the country. One could see shocking scenes. Strikes and demonstrations were going on. There were picket lines. When people went on strike the police opened fire on them. Communist party was leading a struggle on workers behalf. This matter during that time made people believe that it was the only organization that was doing something about Depression.
A sort of relief brought Franklin D. Roosevelt. He became the president and a central figure of the Great Depression events. Roosevelt himself was rich, and he knew not much about lives of the poor. His wife Eleanor went to poor districts and knew how people lived. She saw the conditions of the poor. For these reasons, the understanding how people suffer came to Roosevelt through his wife. Some say that Eleanor was his eyes and ears. People were waiting for Roosevelt to do something during that severe time. This aspect is vital. Any essay about The Great Depression should mention it.
In 1932 Franklin D. Roosevelt for the first time pronounced words New Deal. Roosevelt promised to curb the dynamic effects of 1929’s crash. His New Deal was in response to the Great Depression. Franklin D. Roosevelt focused on the relief for poor and unemployed, recovery of the economy, and reform of the financial system. Even though many politicians were critical for Roosevelt’s New Deal, it made a significant shift in American politics and domestic policy. The New Deal caused the beginning of numerous social programs.
The Great Depression started in the USA but affected many countries. Australia was dependent on agricultural export as well as on industrial. Falling export caused unemployment which reached 29% in 1932. The wages were pressed by increased product prices. Despite all the hardships, gradual recovery started after 1932.
Canada was harshly affected by Depression. The industrial production fall to 58%, and unemployment reached 27% in 1933.
The Depression hit France only in 1931. Its impact was not severe. The unemployment rated no more than 5%. There was no banking crisis in France. The fall in commodity was at 20%.
The Great Depression almost did not influence China but greatly affected Greece in 1932. All attempts of the Bank of Greece to overcome the Depression failed. However, the Greek government managed to strengthen economy of the country up to the Second World War.
The economy of Latin America was highly invested by the USA. The Depression crashed it harshly. Latin America was a big product exporter to the world. It developed its economy by British and USA investments. Thus, its export industry suffered immediately and greatly. The New Deal’s example in the USA served the basis for making steps toward improved life in Latin America.
Those people who remember the time of Depression say that it was a hard time for everybody, and everyone had to compete with others.
1. Background of the Great Depression
2. Economic Impact of the Great Depression
i. Failure of the stock market
ii. “Small scale farmers disadvantaged”
iii. Business and industry failure
vi. Human suffering
vii. Increase of government’s economy regulation
viii. Growth of macroeconomic strategies
ix. Homelessness, discrimination and racism
xi. Creation of dust bowls
xii. Illness and starvation
3. Overview of Stock Market Crash
4. How people bought products on margin
5. How trouble came up
6. Causes of the Great Depression
i. World-wide and domestic factors
6. Summary of the effects of Great Depression
8. Works Cited
The Great Depression
The great depression is an immense tragedy that took millions of people in the United States from work. It marked the beginning of involvement from the government to the country’s economy and also the society as a whole. After almost a decade of prosperity and optimism, the US was now exposed to a period of despair. The day when this happened is referred to as Black Tuesday, and it is the day when the stock market crashed. That was the official date when the Great Depression started. The stock market prices crashed to an extent that there was no hope for them to rise again. A long period of panic struck, and there was darkness in terms of stock market prices. Many people tried as they could to sell their stock, but, unfortunately, no one was ready to buy. The stock market that had for long been viewed as a path to wealth and richness was now a sure path to bankruptcy (Martin 106).
Economic Impact of the Great Depression
Failure of the stock market. The stock market was not the only one that was affected; actually, that was just but the beginning of the Great Depression. In effect, it was unfavorable for the clients whose money was already in the markets for investment: many banks had done that and that meant a huge loss to the clients. It was also a double loss in that though the clients lost their money, the banks were forced to close down. This is because they directly depended on the stock market. When this happened, it caused much panic even to other people, and this is what made them go to the other banks that were open to withdraw their money. This kind of massive withdrawal had a major effect in that it caused the banks to close too. What is more, it was a disadvantage to those who did not withdraw their money because of not reaching the bank on time. After the banks closed, people went bankrupt and could not claim anything whosoever.
Business and industry failure. Industries and businesses were highly affected too. This is because they were also working hand in hand with the stock market. Since the stock market had closed down, this meant that their savings and capital were lost. This affected the labor in the businesses since they had to cut on the number of workers who worked in the corresponding companies. Employees’ wages were also affected because any business could not pay them again as required. The stock market issue also affected the customers in that they stopped buying and spending on luxurious goods. This influenced greatly the companies that produced these commodities in terms of sales and also getting profit. The companies too had to close down (Martin 98).
Farmers. The Great Depression affected the farmers in a very adverse way. Though they always survived other depressions that they encountered, this one was a big challenge to them. Most of the farmers were situated at the Great Plains before the Great Depression took place. The territory was affected so badly by drought and dust storms which were horrendous in nature. They created a situation that was referred to as the Dust Bowl. The farmers were used to overgrazing, and now this had to combine with the effects of drought leading to a blow to the farmers. The latter were even left without food and crops for their animals. This is because the grass that the animals could feed on had already dried up and disappeared in the long run. The loose dirt was picked by the whirled wind, and topsoil got exposed. The farmers were left without crops as the wind picked up everything on its way (Martin 200).
Small scale farmers disadvantaged. Small scale farmers were more disadvantaged than the large scale farmers. They turned out to have a small piece of land on which they had to get their daily bread. Some of these farmers asked for tractors from their respective governments, and thus, they were made to pay some amount to cater for those. The hit that the farmers went through could not enable them to pay their debts. They could also not make it to feed their families, not mentioning themselves. Some of the farmers had also capitalized on the stock market and bank. Since the stock market was affected, and as a result, the banks too, the farmers suffered as well. Losing their investments and crops influenced greatly the way they related with each other and had an impact on their contribution to the economy of the land. The country lost a lot of laborers and this led to the deterioration of the country’s economy.
Unemployment. Many people lost their jobs during this time of the Great Depression. Having lost their jobs, it was very difficult for people to bring food on the table. Families were even forced to sell their houses and move to apartments. Others were made to move in together since the standard of living was going down day by day. Paying rent was now a very hard thing to achieve. It was even complicated for people to separate or divorce. This was the time when the rate of separation and divorce went down. This is because everyone needed the other to contribute, especially in paying the rent. Due to ego, men who had already lost their jobs felt ashamed even to walk in the cities, and, therefore, they were forced to stay in their homes. If at all the wives and the children were working, they felt that their status was challenged. Even in this situation, the two categories aforementioned were forced to go looking for jobs. This time, women were even accused of taking the man’s place after getting a job.
As a matter of fact, it was hard to get jobs locally because every part of the country had been affected. Many people were seen on the roads looking for jobs. Many people could not afford luxurious goods like cars, and thus, very few cars were seen on the roads. A lot of the cars were on sale since maintenance costs were unaffordable. The majority of teenagers were affected as they were the people who were seen on the roads walking up and down looking to get some job (Martin 187).
Older men, women, and families at large were on the rails too. They would be seen boarding trains just to cross and see whether they could get some occupation. Every time there was a job opening, many people applied for the position and chances for employment at such. Those who could not get the job would end up living in shanty towns which were outside the town. The houses in such places were made of affordable cheap materials like newspapers, wood, mud, cardboard, and iron sheets. Farmers who could no longer afford their previous lives would be found in western California. This is because of the agricultural opportunity rumors that came from that area. It is true that there were periods of agricultural opportunities. The farmers were nicknamed as Okies and Arkies.
The Great Depression took place during the reign of President Herbert Hoover. The citizens always blamed the governing President, though he always talked about optimism. Some of the shanty towns which were far from big cities were named after him – for instance, Hoovervilles. Interestingly, newspapers used to cover people sleeping in the streets were called Hoover Blankets. What is more, even bad looking broken cars were referred to as Hoover Wagons (Martin 134).
Human suffering. The Great Depression had a huge impact in that it caused human suffering. It took a very short time, and the levels of living went down drastically. People started borrowing from each other just to survive. Unemployment increased since industries could not take employees anymore. They could not afford to pay the people what they deserved. Research shows that at least a fourth of the labor force in all the industrialized countries could not work anymore (Martin 145). The industries could not satisfy them in terms of wages. This was noticed in 1930, and the total recovery was only realized by the end of that decade.
End of international gold standard. The Great Depression is seen as a cause of international gold standard. There was no money to invest anymore, and it was evident that the interest rates went down too. There was also the introduction of floating rates, and people stopped using the fixed exchange rates. On the other hand, there was an expansion of the welfare state and labor unions in 1930. Union membership went to an extent of doubling between that year and 1940. This was a result of extreme unemployment and the National Labor Relations Act which was passed in 1935. All this led to collective bargaining. The US took an extra mile of coming up with unemployment compensation. This also included the survivors’ and old age insurance. This was incorporated in the Social Security Act the same year. Its aim was to cater for the hardships that the citizens were going through in 1930.
Increase of government’s economy regulation. The rate at which the government regulated the economy increased substantially. The focus was mostly on the financial markets. Different bodies to carry out this function were established. These included the Securities and Exchange Commission which was established in 1934. The main role of these institutions was to control and regulate stock issues in the stock market, especially with regard to the new products. The Banking Act went ahead to come up with deposit insurance, whose role was to work with the banks by prohibiting them from underwriting. Deposit insurance was not so popular in the world up to the Second World War. This time it was able to work effectively, hence achieving its mission and objectives.
Growth of macroeconomic strategies. The aim of the latter was to fight the economic upturns and downturns. As a matter of fact, different strategies were established to fight the Great Depression. An increased focus on how the government spend, tax cuts, and expansion of the monetary fund were some of the ways to fight the the phenomenon under consideration. The government was also trying to work to its best so as to fight unemployment. The banks were also working against recessions.
Homelessness, discrimination and racism. Many people had lost their jobs and it became even hard to get rent for their houses. They had to move to shanty areas which also were not very affordable. Others could not afford anything to cover their heads. This led to building the Hoovervilles. Since so many people were unemployed, there was a huge competition in the job market. Very few could get jobs, and those who did were not paid according to what they delivered. Under the circumstances, discrimination grew and African Americans could rarely get a job. Racism was an issue at that time. Americans were more aggressive as they noticed that there were shrinking opportunities to get a position. The African Americans, Asian Americans, and Hispanics were the people who suffered the most. This is because of the discrimination and racism that were going on. Again, the whites were claiming the jobs which were paying poorly, hence occupying the opportunities that these minorities had before Hoovervilles.
It is evident that in any country there are different levels of people as far as their income is concerned. Where people live is different depending on what one eats. The lifestyle generally depends on what the person earns…
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