The Great Depression Essay Example
The Great Depression was a time period in history that had a significant impact on the economy and the lives of people of that era. The Great Depression started due to the banking crisis, and it took so long to recover because of events like the Dust Bowl and the government’s policies under the Hoover administration. It finally was beginning to terminate as a result of the government's efforts to stop the crisis under the FDR administration.
The cause of the Great Depression was the banking crisis which began in the United States. The banking crisis was caused by a lack of funds. People could not afford to buy what they were producing; this caused numerous people to buy with credit. Consumer debts began to increase due to the surge of people using credit. The banking crisis started in banks but had moved to automobiles and construction as well. The stock market, however, was what prompted the banking crisis over to what we know now as the Great Depression. The stock market crash did not cause the Great Depression, but was an after effect from the banking crisis. The stock market began to fluctuate before absolutely tanking. The banks had invested people’s money in stocks, so when the stock market dropped, the banks were scrambling to receive money back from the consumers to put back into the banks. This was causing the banks to fail. When banks fail and go bankrupt, the people who have put their money in the banks lose it, because there was no FDIC or bank insurance back then. This ultimately is how the Great Depression became so catastrophic. The Great Depression took many years to recover following this.
The road to recovering from the Great Depression was a long one. The Great Depression had lasted from 1929 to 1933, but the complete recovery after the depression would take even longer. An event that hindered the economic recovery of the Great Depression was the Dust Bowl. The Dust Bowl was an ecological event that spread massive storms of dust, creating drought. The Dust Bowl affected the crop production, so this intensified the economic effects of the Great Depression. Government involvement also contributed to the Great Depression lasting for so long. President Hoover had signed a bill in an attempt to protect farmers, however it ended up making the stock market drop dramatically. Hoover also tried increasing taxes, which yet again did not help with the economic catastrophe. As if the United States economy wasn’t bad enough, the world economy also was not doing too great. The Allied Nations still owed the United States money for their efforts in supporting the war. It goes without saying that all these factors combined contributed to slowing the recovery from the Great Depression. However, under a new President, things were beginning to look up and there were efforts to approach the resolution of the Great Depression once and for all.
The Great Depression finally began to end when some steps were taken by the government. Under a new President, Franklin Roosevelt, things were beginning to look up for Americans and the economy. Roosevelt began on his first day by passing the Emergency Banking Relief Act. This was a banking “holiday” to help put a stop to the population’s panic over the money. This also gave time for banks to readjust. Roosevelt also removed the United States from the gold standard. The gold standard was a practice used where the value of an American dollar was based on the amount of gold in the government’s possession. Roosevelt also created the FDIC, which insures the amount of money people have in the bank, this originally was only up to $2,500. The FDIC is something we still use today. Although Roosevelt made several legislations that all lead to approaching the end of the depression, the last one I will discuss is the NRA. The NRA was a group of people who gained control of setting the prices and wages for working conditions. The NRA helped for a little while before businesses began tired of the regulations, eventually leading to the NRA being deemed unconstitutional. The NRA, as well as the CCC, the AAA, and the NIRA all would become what is known as the First New Deal. Although some of these programs did not last very long, these programs did help lead the economy back to where it needed to be. These all were Roosevelt’s approaches to the beginning of the end of the Great Depression.
The Great Depression was a terrible time in US history for the people living through it. The Great Depression was fueled by the banking crisis and took what seemed like forever due to the Hoover administration. But finally, the Roosevelt administration began to lead America out of the economic depression.