The Great Depression - Essay Example

Download file to see previous pages The great depression started in the industrialized North America when the stock market exchange on Oct.29, 1929, commonly known to be “The Black Tuesday” (Nick Taylor-American Made). As at this time, the output fell by 23% losing more than ten billion US dollars. The market decline was due to disparity between the consumption and production sectors. The production power was due, but the consumption rate was wanting. The producers had to credit their products resulting to lack of finance to these companies hence a subsequent drop in the wages and loss of jobs for the employees (Stock, 1997:177). Many banks realized great loses some of which even saw their closure because most of them had heavily invested in market shares. The problem was major in America but it spread to other countries leading to an economic slump due to forged intimate relation that came in between the United States and the European countries to terminate the First World War. Since United States had emerged as the super power of the First World War, its economic back thrash had effects across the globe. The depression persisted up to 1932 when the then president of USA Herbert Hoover realized that he had a hand to lend to terminate the depression. In his speech president, Hoover underrated the crisis and said that it would ultimately end. He did not realize that he had to supply food to the hunger stricken population in North America. People raised blame over him for the big economic crisis (Young and Young, 2007:55). Hoover was turned down and an election was called where Franklin Delano Roosevelt won by a large margin. After taking over as the president of United States Rosevelt declared a four-day bank holiday meant relief to relief the banks and make them solvent. During the first one hundred days of his reign Roosevelt set good basis too revive the country from depths of desperation. The great depression had adverse effects to the economy as well as the people of United States. The production level dropped greatly as well as the gross domestic product after the recession started. The lack of market for manufactured goods was the main reason for the decline of the production in the United States (Oakes and Kia, 2004:137). The consumers had lost their purchasing power, which was probably due to the effect of the First World War. Most industries had to give their products on credit leaving them with financial crisis. This led to their immediate closure. The collapse of food prices and lack international market for export made farmers lose morale and quit farming. Credit system in bank declined hence most of the depositors had no option but to withdraw their money from the banks. The experience for the Americans worsened in the 1930s when the agriculture sector leveraged due to the decline in the world market for food prices. The depression also led to lack of jobs in the states. Many people had to move from placer to another hoping against hopes to secure job in the towns. The teenagers comprised the large proportion for the job seeking population. This desperate large population had constructed their houses in shantytown in the outskirts of towns, which they made from any available material. The desperate farmers migrated to California in hope to find fertile grounds. Their condition was seriously transient. When he came to power, Franklin Roosevelt instilled hope to the States residents .He started the so-called ...Download file to see next pagesRead More