THE GREAT DEPRESSION

By: Odalis CedanoEnglish Period 1

The Great Depression took place in the United States, Europe and in other countries. But the one that took place in the U.S took place from the year 1929 to about the year 1939. The U.S. Great Depression was basically an economical slump that happened in North America. An economical slump is basically when many things are going wrong with your economy. Like you owe a lot of money (debt in other words), you need money, or your stock markets close or go bankrupt. The Great Depression was the longest and most severe depressions that anyone in the industrialized Western World had ever experienced. Many people were affected by this Great Depression. People who owned stock markets, children, adults, and anyone you can imagine was affected by this Great Depression. The Great Depression was mainly caused because of many bad stock markets. Those bad stock markets lost a lot of money which eventually let into debt. Many people have said that the Great Depression began by a very catastrophic or terrible collapse of the stock-market prices on the New York Stock. During this Great Depression Herbert Hoover was the inaugurated president in charge. When he was only a few months into his term of

presidency the Great Depression had occurred. The Great Depression was the most catastrophic time in American History so far. It was the most catastrophic because it caused a lot of damage, it also put the stock-markets/ economy in trouble, and it just lead to pure chaos.

The Great Depression was catastrophic because it put the stock-markets/economy in a tough situation. The start of the Depression all started with the stock-markets. It all began on the rash of the stock-markets on “Black Tuesday” on October 29, 1929. On that day the Dow Jones Industrial Average fell by almost 23 percent. The market also lost between eight billion and nine billion in value. On October 29, in just one day, the stock-market’s frantic traders sold off 16,400,000 shares of stocks. At the end of the year the government determined the investors in the market had lost about $40 billion dollars. There was also a 89 percent decline in the stock prices. Because of that many people were in great debt. They lost a lost a big amount of money. The stock-market continued to decline

unemployment rose and the wages, the pay, fell for those that worked. As the stock-markets continued to decline banks started to fail. Many banks were forced into insolvency, by 1933, 11,000 of the U.S.’s 25,000 banks failed. Eventually the failure of the many banks combined with loss of confidence in the economy led to reduced levels of spending and demanding. Because of that millions of people lost all their savings suddenly.

To see the damage the stock-markets really caused lets look at the Dow stock before the depression and after. Before the depression the Dow stock’s average was better. Many investors would purchase shares because they liked the facts that the stocks were thought to be extremely safe. They thought that because of the economic boom that occurred at the time. Many investors bought stocks on margin which means that they borrow the stock for the purpose of gaining any financial help or leverage. It seemed like a pretty good deal because for every dollar that was invested the margin user would borrow nine dollars worth of stock. So the ratio was 1:9. So if the stock went up even one percent the investor would make ten percent. It can also work the other way around. That means that it can add to minor losses as well. So that means if

the stock drops a lot then a margin holder could lose all of their investment and most likely owe money to their broker. So back to the Dow stock. From 1921 to 1929 the Dow stock went from 60 to 400 creating new millionaires. The stock trading became America’s favorite pastime . The investors mortgage their houses and they foolishly invested in their life savings into popular stocks like Ford and RCA. They did this because they never thought that a crash was even possible. They always thought that the stock markets “went up”.

The stock-markets crashed because The federal Reserve raised interest rates in attempts to cool down the overheated economy and stock market. ON Thursday October 24, 1929 panic occurred as the investors began to realize that the stock boom was actually an “over-inflated speculative bubble” . Many margin investors were being destroyed as the large number of stock investors tried to reduce their shares to the point where they can’t use them any more. Millions of millionaire margin investors went immediately bankrupt On October 28 and 29. The Dow stock sank from 400 to 145 during November. And in a three days over five billion worth of market capitalization had been erased from the

stocks that were trading on the New York Stock Exchange. Then by the end of 1929 stock markets crashed and a 16 billion dollars worth of market was lost from the New York Stock Exchange. In 19 32 and 1933 banks and investors hit rock bottom. They went down about 80 percent from their high in the 1920s. This had very sharp effects on the economy. The demand for goods declined a lot because people felt poor because of their losses in the stock market. Any new investments couldn’t be financed or be made through the sale of stock because no one would buy the new stocks . Well its pretty reasonable. They didn’t want the same thing to happen. And they didn’t want to fall more into debt.

So the stock markets really had an effect on the people. People went bankrupt. People lost everything they saved. People lost everything fast. And some people even stayed in debt. The Great Depression was very catastrophic because it’s stock-markets really did a number on people and their families.

The Great Depression was also a catastrophic event in History because it cut out a lot of people from working . There were many unemployment cuts done because of the stock-market. While the stock-market kept on rising unemployment rates were rising. Millions of people lost their jobs. Many farmers and businesses were left bankrupted. As the output dropped almost half the population in the U.S was in desperate circumstances. The farmers that were unemployed and regular farmers had it a little hard because they already had a little depression of their own before. Because the collapse of food prices with the loss of export markets after World War One. Also because of the years of drought that were marked with huge dust storms the would blacken the skies at noon and scoured the land of topsoil. Most city people lost their houses. But the farmers has it rougher because they lost their house, their land, and their equipment to foreclosure. The reason why they lost their houses was because they didn’t have that much money. So they couldn’t pay the rent. And since some owed money the people who had invested them into mortgage lost everything.

While this was affecting the people President Herbert Hoover was resisting the calls from Congress, Governors, and Mayors as the jobless population was growing. Those calls from the Congress, Governors, and Mayors were to fight unemployment by financing public service jobs. He encourage these types of jobs, but said that it was up to the states and local governments to pay for them. Which would cause little bit of more strain on the people. By the year 1932 the unemployment rate was so high it went past 20 percent. Since that happened thousands of banks and business were no good anymore, they failed. Millions of people were homeless and with no job. And many woman and men came back “home” with sad faces. Why? Because they would come back from fruitless job hunts. Which means they went out to get a job, but they weren’t accepted to any. They would get even more sad when they had padlocks on their homes. And their families and belongings were left out on the streets.

Many people were so desperate to find a job. They would go from town to town searching for “non-existent” jobs. They

Were desperate to find a job because they needed one. They needed money to buy necessities. There were more people that lived at the edge of the cities in shantytowns their residents called Hooverville.

Many people were affected by this. Mostly everyone was homeless and on the streets. The Great Depression is the most catastrophic event that has ever happen. Because people lost their jobs. And when they lost their jobs they lost their homes since they couldn't pay the rent. Then when they lost their home they were homeless and living on the streets.

There really wasn’t any accomplishments made in the time of the Great Depression. All that happened was damage. There is one last key point that I have that shows why the Great depression is the most catastrophic event that has happen to the United States so far. That one reason is the damage. This Great Depression made a lot of damage. As you can tell by the paragraphs before, the Great depression made many people suffer. All the damage that was made will never be undone. Those people will know that pain for the rest of their lives.

There was so much damage made. One of the damages was that people were bankrupt. They had no choice. They couldn’t change the stock market because they didn’t know it was coming. They only thought that the market could go up. So they went bankrupt. Some even owed debt. Since they didn’t have any money another damage was made. People lost their homes. They came back to padlocked houses and their things outside. They had to be homeless unless they had the money or a job. They had to stay on the streets and live on the streets. The farmers had a little more than just the house taken away. They got their land, house, and equipment taken away by foreclosure.

Another Damage they had was that they lost jobs. Many people were getting cut from their job. Many people would go from town to town looking for jobs, but they were sometimes unsuccessful. Many people went to find job and when the day was over they had an unsuccessful luck. They couldn’t find a job for

themselves. So when they didn’t have jobs they couldn’t get the money. So if they didn’t have the money they couldn’t keep the house. They also couldn’t get food.

Many people would starve to death since they couldn’t get any food at all. Many people would go digging through the trash cans and dumps for food. The children would most likely get swelled stomachs. Many people would die since they couldn’t take it anymore. That is another of the damages that the Great Depression caused.

Death. Many people died of hunger. Many people would die probably because they fight over food or something. Many people would suicide than the even be like that. Many people would suicide themselves from the building like banks. Woman, Men, and Children of all ages would die every single day of hunger or of many other reasons.

Another damage that the Great Depression caused was

the shutting down of buildings. Many factories would shut down, lock their gates, shops would be shut forever, and most of the remaining businesses would have a very hard time coming through. The local government had a lot of difficulty collecting the taxes to keep the services going.

Farmers also got some damage done to them. Farm prices dropped down to very low records and the families would try to keep out foreclosure. Since people were losing their jobs by the end of the ten years about 4,340,000 American were jobless or out of work. Then more than eight million were on the streets a year later. The Great Depression made people suffer a lot. More than anyone can imagine. The Great Depression is the most catastrophic event to take place because it caused damages that could not be repaired easily. They would take time to repair. It seems that the Great Depression only accomplished making damage and trouble.

So in conclusion, the Great Depression was the most catastrophic event that has ever happen in U.S. History so far. My three key points that can prove this are the damages it caused, the stock-market values/rates, and also unemployment. The stock-market trade that occurred in the Great Depression was the main start of the Great Depression. It was the origin of the problem. There are many things to discover about the Great Depression. You can discover the stock-market and how it works. The people who were in this event discovered how the stock-market actually works. They discovered how it is to live the life of a homeless person. I personally believe that the Great Depression is unique. Why? Because nothing like it has ever been such a big crisis every before to go global. The Great Depression is the most fascinating historical event to happen to the U.S. so far that I have learned about. The Great Depression helps you learn about new things, and it help you learn about how foolish people can be and how greedy they can get. I honestly think that the Great Depression caused nothing but trouble, but it taught people a good lesson.

It taught people that you can’t be foolish and just act on your own accord. Be happy with what you have now. Don’t be too greedy that you spend all your money on something that might hurt you later. It also teaches me that people really didn’t think thoroughly before. I think that the Great Depression should be taught to everyone to show how foolish one can be because of money and what the consequences might be later on.

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