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Great Depression Essay, Research Paper

Great DepressionThe Great Depression was a disastrous business slump that affected millions of people throughout the entire United States. It began in 1929 and continued on, to some degree, until 1939. People lost their jobs, and families lost their homes. The country was in total chaos. Some believed that America could never totally recover. There were several factors that contributed to the start of the Great Depression. One of them was the crash of the stock market. It was 1929, and Republican Herbert Hoover had just been recently elected. During the previous few years, the stock market had been steadily rising, and everyone wanted their piece of the profits. By this time, over 1.5 million people owned stock in various companies. People in every kind of financial situation owned stocks. It seemed that it was an easy way to make money, and most investors were getting rich. The stock market reached its all-time high on September 3, 1929. This caused even more people to buy stock. In October of 1929, however, the stock prices slowly began to decrease. This did not bother the stockholders that much because they just figured that the stocks would go back up like they always did. Unfortunately, these predictions were terribly wrong. On the 24th of October, the stock market plummeted. Shareholders rushed to sell their stocks as quickly as possible, but they found no buyers. The 24th came to be known as “Black Thursday.” Five days later there was a “Black Tuesday.” That was when more than sixteen million stocks were sold at a great loss. One stock had dropped from one hundred dollars to only three dollars per share. The President and the bankers tried to assure people that there was not a crisis and that it was only a temporary situation, but they could not have been more wrong. When the stock market crashed, it upset the whole economy. Because the stock prices were so low, no one would invest in them. This meant that the large and small companies who depended on the stockholder’s support now had major financial problems. Thousands of employees had to be fired because the companies could no longer afford to pay them their salaries. Many factories, mines, and businesses were even forced to shut down due to the terrible economic crisis. When all of these workers lost their jobs, they could hardly afford to buy food or clothing, therefore, many of the stores were not making enough money to survive either. This caused more people to be fired and more businesses to shut down. It was a continuous cycle that caused the economy to get worse and worse. The unemployed people desperately needed money, so they all rushed to the banks to take their savings out. Unfortunately, most banks had also been hit hard by the crash of the stock market. The banks, like the people, had bought large amounts of stocks when they were doing so well. When the stocks dropped, they could not afford to give their customers the savings account money which they demanded. The lucky people who still had their jobs were forced to take a substantial pay cut, the average of which was about fifteen percent. Most of them were still happy because they knew that they were way better off than those people who were without work. Breadlines and soup kitchens were established by the cities to help those who had been fired. Many of the unemployed were ashamed to have to accept handouts, but they had no choice. It was the only way for them to feed their families. One man from Pennsylvania wrote:”This is the first time in my life that I have asked for help, but the way things are now I must. I have been out of work for a long time and my wife is sick in bed and needs medicine, and no money to buy nothing to eat and what is a fellow going to do. I don’t want to steal but I won’t let my wife and boy cry for something to eat.” This quotation shows how bad the times were and just how desperate the people were becoming. Only six months after the crash of the stock market, more than four million Americans had lost their jobs. Many of these people could not pay their rent, so they were forced to evacuate their houses or apartments. Despite this terrible economic situation, President Hoover was still telling the citizens of the United States that the hard times would soon end, and that they had nothing to worry about. The new problem facing the homeless was finding a place where they could take shelter. These unfortunate people could not afford their old houses and apartments, but they could not just live on the streets either. So the homeless came up with a new way to survive. They built tiny homes made out of whatever they could find. Some common components were boxes made out of wood or cardboard, old car parts, newspapers, and tin pieces. When a large number of these homes were in one area, they came to be called “Hoovervilles.” The people placed the blame of their predicament on President Hoover.Americans were becoming very angry and discouraged with their situation. In March of 1930, many Unemployment Councils had formed in the nation’s larger cities. The Unemployment Council in New York City held a demonstration in the city’s Union Square. Over ten thousand unemployed people showed up, and a huge brawl broke out between the police and them. Things were only becoming worse, yet the President still could not understand the extent and seriousness of the depression. While other citizens were having to survive on almost nothing, he was in the White House living comfortably with plenty of food for his family and himself. By the year 1932, there were more than fourteen million jobless people in the United States. This was equal to one third of all the potential workers in the country. The number may have risen as high as twenty million unemployed, but no one knows for sure. Stocks were worth on the average only eleven percent of the price that they had reached in 1929, and

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