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The Great Depression

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FC: The Great Depression

1: Lots of kids and maybe some adults wonder "What caused the Great Depression?" Well today, We will learn and understand what the great depression was. The Great Depression mainly all started right after World War One, and even before that. In the year 1913, the democrats controlled most of the government, congress, and the White house. The government wanted to regulate the economy, thus, enacting a plan called the Federal Reserve System. Which would lower interest rates, and since people saw a rise in borrowing, they figured "Hey! What a great opportunity to use this!"

2: In 1920,The United States had just finished fighting the greatest war in history (up to that time).Nobody really cared about anything because, well, they had it. So, what happened then? The Roaring twenties (1920-1929) was in full swing, and many people were making TONS of money.How was this happening? Well, investors would invest in a stalk(s), pay for part of it, then they would borrow the rest, and pay it back later.

3: This was called "Buying on Margin". So, more and more people would do this and the stalks would be (in a sense) over invested in. Since the Federal Government placed the Federal Reserve System Act back in 1913, the economy was completely dependent on that low interest rates and inflow of money from the Federal Reserve. In the year of 1929, the Federal Government decided to raise the interest rates. So with that, fewer people would borrow money. All and all, it mostly is a chain reaction from there. Since fewer people would buy stalks, less money would be in the economy. Since less people would buy stalks, the prices went up and some investors saw what might happen. So,they sold their stalks, and got out of there. Since there was fewer and fewer investors, things were going down. On October 29, 1929, the stalk market crashed. Causing a nation wide panic. People RUSHED to their local bank wanting all of their money out, and closing their accounts. In 1927, the Federal Government passed a law which would restrict the amount of branches in the state it originated in. In other words, no bank could go outside of the state it was founded in.

4: If you add up all of that, then include this in the equation. The Federal Government raised taxes on imports from other countries. Just like how raising interest on borrowed money, it scared other nations from trading with the United States. Making matters worse, the other countries raised THEIR taxes on imports from the United States.

5: The picture shown here is just one of the 9,000 banks that shut down because of the Depression. This terrible time period lasted about twelve years. Which unfortunately, took its toll on most people. Hundreds of thousands of people went bankrupt and lived in the streets between the years of 1929-1941.People blamed President Hoover for all of this and the little areas the homeless people stayed in, was called "Hoovervilles".

6: Life was hard during this time period. People lived in houses made out of anything they could find. Such as Cardboard, Scrap metal, anything. Men and boys would go out and look for work, they would walk the country or hitch-hike on trains. Unfortunately, not many of them would have much luck, about 60% of businesses failed in this 12-year period and that meant most of them were out of a job until World War Two would start.

7: People affected during this era, would mostly be middle class and under. 25% (or 15 million people) of those who worked before the Depression, would have a high risk of being homeless, by the time the Depression ended. Farmers got hit the most by the Depression. They would borrow money from the bank and they would buy land and supplies with it During World War One. Then, the food demand went down when the war ended and Europe didn't need it any more and when the crash happened, they ended up loosing their homes and land.

8: Not only that, the Dust Bowl took place. Which destroyed towns and land turning it into worthless dirt. Due to overuse of the soil.Here are some more photos of the hardships and living conditions that people had to work with during the depression.

10: When President FDR (Franklin Delano Roosevelt) Took office from 1933-1945 he developed programs that didn't exactly bring the economy back on track, he more or less slowed it down. Such programs include, Emergency Banking Act/Federal Deposit Insurance Corporation, Federal Emergency Relief Administration, Civil Works Administration, Civilian Conservation Corps, and a WHOLE LOT more programs.

11: With all this misery now, some wonder "how did all of this end?" It all ended with the bombing of Pearl Harbor. Which was the final step to the United States entering World War Two. Military production skyrocketed making guns, knives, planes, uniforms, ect. With all of the supply needs, factories would have to change, and produce products for the war effort. Now since most of the world was at war, the United States was having to crank out so much supplies which created jobs; getting us out of the great depression, and putting more people to work.

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  • By: Andrew M.
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  • Title: The Great Depression
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  • Published: almost 6 years ago