The Great Depression

The Great Depression

Introduction

The Great Depression refers to economic crisis which began when the states experienced a crash in stock-market. That was the period that was characterized by low business activities. The Great Depression affected the U.S and other countries. The great depression was the deepest and lasted long while negatively affecting the economy in the western part of the world. The depression covered the western industrialized countries between the year 1929 and 1939. This research study seeks to evaluate the impact of the Great Depression and various strategies that were used to limit its impact and whether those strategies succeeded or not.

Findings and Analysis

The Depression crisis hit The United States of America at time President Hoover and his administration had not anticipated for such an event. President Hoover, therefore, had limited response towards it which could not rescue millions of Americans who were in need during the crisis. Many people argued for a more direct government that could respond to such crisis with an immediate effect. However, President Hoover was hesitant in giving support. The steps rendered by Hoover were inadequate and slow. The programs that his administration established to enable the population to get back to work and calls for the state charity were not enough to cover for all the casualties. Moreover, the programs were meant for only a particular group leaving out others to survive through their means which were difficult to attain.

In his initial reaction to the Great Depression, President Hoover reassured Americans that everything was well. He attributed lack of confidence in the US future economy as foolish, a fact that caused debate among many economic analysts. Just after two years, things started to shake up in the country. It is at this time, in 1931 when he promised to order Federal aids if starvation could hit the country once again. However, this was not fulfilled since many elderly people and children were reported dead due to starvation in the preceding years.

Hoover organized for programs meant for state relief.  An example of such a program was the reconstruction of the Finance Corporations. The program was used by him to boost the confidence of the public towards the State’s financial institutions.  Later, the Americans protested against the inability of Hoover’s government to offer solutions to the challenges caused by the Great Depression. Despite his call for the military to stop the angry Americans, his popularity went down in the year 1945 through chaos and protests.

Dust bowl refers to a place in Midwest that was profoundly affected by drought during early 19th century. According to the scientists, the drought that wrecked Dust Bowl was the worst to ever happen in North America in 300 years. The same drought that demolished the Dust Bowl destroyed crops that covered the soil, a factor that led to raising of huge dust when the wind blew. Similarly, this drought caused many effects in the effected states.

Firstly, all the places were covered with dust including the houses due to drought. Children suffered from pneumonia while animals suffocated due to inhaling dust. Later, dust was blown to Washington DC by the storm where large parts of production from agriculture were ruined.

Secondly, the drought that destroyed Dust Bowl hit Mississippi between the year 1930 and 1931. It extended to the furthest east and affected eight of the states in the south. In Arkansas, drought was regarded as the worst. Most of the cash crops including cotton had their value considerably depreciated. Most of the foods could not grow due to the effect drought, and therefore, many Arkansas quit growing anymore. Dust storms that were fourteen in the year 1932 increased to 48 in the following year.

The drought effected the economy of the Dust Bowl among other areas that were affected economies in many ways. First, farmers were forced out of their daily operations and therefore could not earn their living.  Homes and lives were lost through effects of drought. The prices of crops that farmers could earn their living from fell beyond value. To reduce the impact of Drought, the federal State donated food and other aid to the area that were affected including the Dust Bowl. Secondly, six million pigs were slaughtered by farmers with the aim of boosting the prices through cutting short the supply, a move that the public protested forcing the federal government to establish a corporation where surplus food could be kept and taken to feed the poor.

Depression and famine caused farmers to sell their farms by ten percent in the year 1934.  20 % of the farmers were seeking government’s emergency relief by the year 1937 while many others escaped to California to look for work which could not be found at that moment. Many people who went to California ended up without homes.

Around 16 million shares were traded by the investors in the stock exchange belonging to New York in a single day of 29th October 1929.  Many other investors were wiped away because of losing a huge amount of dollars. The Depression hit the America and the Midwest after the stock crash and lasted for ten years causing a big negative turn to the economy.

The US stock market experienced fast growth during the 1920s where it reached its climax in the year 1929.  There was an excess of the real value of stocks due to increased unemployment rate and the low level of production. Low earnings, high dues, a fraught agricultural sector and huge bank loans are among the causes of market collapse.  The prices of stock went down from September 1929, and its fall began just after then. Many investment companies tried to remedy the situation by buying stock. However, the market finally collapsed due to series of high prices.

On the other hand, the Black Tuesday came prior black Monday where there was a free fall in the market proceeded. The earlier was characterized by the complete collapse of the stock prices. Shares were therefore traded in New York in a single day which resulted to investors running away from the current market.

The prices for stocks continued to depreciate in the US because the state had focused its attention on the Great Depression. As a result, the price of stock in the year 1932 was only twenty percent the price of the same stock before the stock crash in the year 1929. The Wall Street crash is not the only cause for the Great Depression but it triggered the collapse in the worldwide economic, for example, the American’s status, in particular, had deteriorated leaving high rate of unemployment and failure to many banks in the state. President Franklin D. Roosevelt and his administration offered relief by enacting measures that helped to reduce the effects of the Great Depression.

The FDR deal was welcomed by many Americans since it could bring relief to the people from the effects of Great Depression. Indeed, the quality of American’s life improved.  The FDR brought about by Roosevelt was voted in four times for believing that its remedies would make the effects of the “forgotten man” to be out of their minds.  In his move to make the prices of the farm and manufacturing stable, FDR used a “bold, persistent experimentation,” slogan that was referred to putting more efforts that are different from the usual ones.

Immediately after winning the presidency, Roosevelt announced directly over the radio to the American people that confidence would be restored. The legislations that he passed in his first 100 days was meant to make the industries stable and bring back the lost dignity of the financial institutions.

Conclusion

Many questions have been asked about the effects of the Great Depression. Some of the questions have been going unanswered while others have been answered by the articles and authors’ work. This research study has evaluated the effects of Great Depression and the surrounding factors including the contributions that various individuals rendered in ensuring that its effects are controlled. It is worth optimism that the affected states finally recovered and continued with their progress normally.

Bibliography

Blumenthal, Karen. Six Days in October: The Stock Market Crash of 1929. New York, N.Y.: Atheneum Books for Young Readers, 2002.

Haugen, David M., Susan Musser, and Vickey Kalambakal. The Great Depression. Farmington Hills, MI: Greenhaven Press, 2010.

Nash, Lee. Understanding Herbert Hoover: Ten Perspectives. Stanford, Calif: Hoover Institution Press, 1987.

Nishi, Dennis. Life During the Great Depression. San Diego, CA: Lucent Books, 1998.

Saul, S. B. The Myth of the Great Depression 1873-1896. London: Macmillan, 1989.