The Stock Market crash of 1929 has been looked at as the greatest symbol of depression is our countries history. Although the Stock Market crashing had a huge effect on the beginning of the Great Depression, there are still factors to consider when looking for a source to blame. It’s hard to put responsibility on the stock market for something so huge and disheartening. The Great Depression is seen as a slippery road downward, not a sudden jolt into hopelessness.
The Stock Market in the 1920’s had consistently seen prices climb over the last few years. By the fall of 1929 the prices of stock were severely overpriced and unaffordable. When stockholders saw the severity in the prices they all panicked and began to sell all the stock that they owned. This is what caused the Stock Market to crash. Other causes for the Great Depression are there just not obvious.
The Tax system in the United States in this period was struggling. Income Tax on the middle class was way too high. The middle class would end up paying the vast majority of the tax. Rich and well off people, seemed to find loopholes in the system to get around paying the taxes that they should. This led to the rich getting richer and the poor got poorer. Unemployment rose to a high of 25%.
Due to the lack of money in the middle class Americans pocket, there was a great problem with overproduction. The products were being made, but no one had the money to buy anything. The Americans although were given a false sense of security throughout this rough period being told that everything was going to be okay.
The banking system of the 1920’s is not what it should have been. Today we have insurance on the money we put in the bank, so if that bank should go under, we can still have our money. This was not the case in the 20’s. If your bank closed, and many of them did, you lost all the money you had saved. No one could help you and many families ended up on the street due to this loss.
Bread lines were now crowded as people tried any way they could to feed themselves and their children. Suicide was now at a high as well. Many businessmen or farmers and really anyone else who had lost their job or business due to the times often committed suicide as the easy way out. The way out of the Depression was a long road ahead.
FDR, in my opinion, is mainly the reason that the Great Depression ended. FDR would hold “fireside chats” everyday on the radio. This was very consoling for a country who thought they were headed nowhere. It was nice to hear a man of power tell you that everything was going to be okay. He gained even more great respect after announcing the New Deal.
The first New Deal was aimed towards business recovery. He insisted that the banking industry now be regulated and developed F.D.I.C. that would insure your deposits up to $5,000. This is the same system that we use today.
Another situation that helped pull us out of the Depression was WWII. Although WWII is frowned upon by most simply because it is a war, in a sense it was exactly what this country needed. War production immediately created thousands of jobs and people were now actually making money for a cause that greatly helped the country and the soldiers.
The Great Depression was just that, depressing for the people of the United States. It caused many to give up hope. But its situations like this that often leads to better situations in the end. The Great Depression may have been a horrible period, but there are some good that came from it.