FC: The Great Depression By: David Snoberger
1: The Great Depression. A time a change. A time of heartbreak. A time of struggles. Things seemed to be looking good towards the end of the roaring 20's. Jobs were everywhere, entertainment was on the rise, and our culture was building. Suddenly, the stocks plummet, and the entire world is plunged into a depression. But what caused this abrupt and surprising change? Well, let's take a look at it. | Around this time, credit started creeping into the minds of consumers. People could borrow a loan for something they couldn't afford at the time, but they could pay for it in monthly installments. This however, led to a problem. Banks were giving out loans to people who they knew simply couldn't pay for it in the long run, but they did it anyway, and when they didn't get the money for it, that hurt the banks. | It didn't stop there though. People were using credit to invest in the stock market. This is called margin buying. This worked when it is a bull market, where people are buying a lot of stocks, but doesn't work if it's a bear market, when people are selling stocks. This led to uncertainty around the country that if we continued, than a crash could happen.
3: On October 24, 1929, it finally happened. Investors started dropping stocks left and right. So many people sold stocks that it started a cascade, that affected millions of people. By October 29, prices were at an all time low. As prices were falling, brokers demanded customers to sell their stocks at huge losses to cover the loans. This led to thousands losing everything. | With many people broke, the depression finally began. Not too many people were involved in the stock market during this time, but banks who invested took a huge hit. They couldn't give their customers their money that they had inside the bank, so many banks closed. People who put their life savings in a bank that closed lost their money forever. Now it was time for the government to step in. | A not too well known fact during this time was that Hoover did in fact intervene on behalf of the people. Him and the government attempted to stimulate the economy by bailing out banks and industries, unlike the laissez-faire that most people think of. The US had other depressions before, but this was the first one that saw government intervention, and the people paid the price.
5: However it may have started, it had a lasting effect on the American people,. People ran out of money. Since people didn't have any money, nobody could buy anything, so businesses couldn't sell anything. This domino effect meant that almost everyone in America was affected. Immigrants weren't traveling to the US anymore because they heard of how poor they were now. | Life during this time period was very limited. Money had to be saved for essential things like food and water. Many people because homeless. Some created shantytowns made out of left-over boxes, wood, et al. African Americans were treated the worst though. Just to add to the racial discrimination that was happening during this time, most white managers wouldn't allow blacks to work, instead picking white men. | Unemployment continued to plummet even when FDR, one of the most respected presidents ever, was elected. He introduced the New Deal, which led to many new government programs being created, including Social Security,and the Federal Housing Administration. Looking back at it now, many of these programs were socialist in nature, so during WW2 many were removed.
6: By the end of the 1930's, it looked like recover was never going to happen, but WW2 changed all of that. The US needed soldiers, so tens of millions enlisted, effectively ending the unemployment problem. Factories were built, so production jobs were also created. By the end of the war, America became the world's biggest superpower. | So, The Great Depression was a difficult chapter in our nations history, but we were able to survive, and we were able to come out of it as the most powerful nation in the world.