The Great Depression

welcome to the 1920s everything is cheap and we're having the time of our lives there's absolutely no way this can end oh but it can back in the roaring 20s the economy seems stronger than ever new inventions the rise of consumerism Gatsby and those overall positive attitude towards the future but as everybody knows that didn't come in the span of a year the incoming 1930s would rein in with financial ruin and economic turmoil so what happened how did nobody see this coming with the magic of 80 years of historical foresight now we know and use these accidents of the past to surely stop another financial crisis from ever hurting the world again in the 1920s the economy seemed stronger than ever it was apparent to many that economic crashes often followed these periods of growth but this time it seemed different in the United States many had placed hope in the Federal Reserve established in 1913 this was created to counter previous issues in the market through its various regulations of the nation's economy many believed an economic crash was unlikely if not impossible this made even wise investors completely oblivious to any potential danger the positivity from stockholders contributed to a skyrocketing amount of faith in the market many had idealistic views of the stocks and the market in general this positivity spread like wildfire and everybody was convinced this growth was here to stay this faith wasn't backed up entirely by reason the causes of the Great Depression are still debated however a couple major events contributed to the stock market crash by the late 1920s overproduction of wheat caused a significant drop in the stock prices in that industry at the same time other markets were in a state of over-production leading to more of a surplus than seen in the years past this began a loss of confidence in the market many realize the prices of stocks were unrealistically high of course stockholders also realized this and sold their stocks a chain reaction is only natural for others too in the process it's easy to identify October 29th 1929 also known as black Tuesday as the start of the Great Depression in reality the crash actually started days earlier on Thursday also known as Black Thursday this was when stock prices began dropping at an increasing rate and by Tuesday the market had reached mass panic the resulting collapse of the market left many aware that a new age of economic distress had just begun a general lack of faith and the economy means a public that is far less willing to spend money the immediate side effects of the depression affected the shareholders the myth of those guys jumping from buildings right after the crash that was true they had such faith in the system they lost all of their wealth immediately for others the full effects of the crash would take years slowly draining them back in 1929 only one out of every 100 people took part in the stock market so it would be easy to assume that 1% of the population is affected just five percent of Americans had 33 percent of the money but this was 5 percent that was also often employing a good number of Americans too on the surface level it's easy to assume a stock market crash only affects the stockbrokers and the wealthy but the effects quickly spread to the general public see as the employers lost money they couldn't pay their workers this resulted in lower wages and increased unemployment those employees who were getting paid less or not at all were far less likely to buy products which were being sold by other businesses now those businesses couldn't keep up a profit and had to cut wages or employees this endless cycle is what resulted in the eventual 25 percent unemployment rate and a constant cycle of poverty luckily President Herbert Hoover was doing his darndest to help the dire situation he was against the government meddling in corporate affairs and tried to solve the issues of the depression with alternative means to regulation this was perceived as lazy by the American people and it didn't help that Hoover's presidency had just started months before the depression began identifying him as the sole cause was pretty easy for the American public and would become trendy for many to do so later on it didn't help that he approved a tariff increasing prices from European importers this attempt to boost American business only angered foreign nations and led to less overall business so everybody was seeing less trade outside of cities homeless Americans forum Shack filled towns considering again a 25 percent unemployment rate often called Hoovervilles it was apparent the American public was not happy with their president's work and many felt that Americans were in a desperate need of no God New Deal amazing foreshadowing later in Hoover's presidency he began adopting policies that abandoned his hands-on approach public works projects and government loans helped out a bit but not enough to wave public anger towards the 31st President so in 1932 election season had approached and the American public had a new figure to put their faith in many of you know what's coming up but yes it was Franklin D Roosevelt he won the election and made it quickly apparent that he would handle the depression differently than his predecessor the presidency of FDR is often cited as a shift in American politics never seen before and likely never be replicated before this presidency the federal government while not entirely absent was more or less unimportant in the day-to-day lives of the American people definitely a generalization the whole scope of FDR's effect on the presidency is a whole topic in itself so let's just stick with the depression for now anyway FDR made it quickly apparent he was willing to try anything to reverse the economic downturn immediately he declared a bank holiday this was to stop the immediate panic of the public withdrawing money from banks in huge numbers resulting in closings of banks across the nation he started many federal aid programs immediately kick-starting the now often revered or despised New Deal the New Deal encompasses many programs and agencies started by FDR while I'm sure you would absolutely love for me to go into detail on each and every program I feel it's better if I just gave you the basics New Deal programs included bank reforms to protect against banking defaults temporary jobs to improve infrastructure and the end of the gold standard at the same time the nation's saw the repeal of prohibition which saw a boost to tax dollars paid and an end to bootlegging the first few years of Roosevelt's presidency saw some improvement to conditions but while many programs did help it was not substantial enough to end the depression many americans would gain these temporary government jobs and by the end of the program they would see a small boost in wealth but finding new jobs was still a challenge so as obvious as it may seem temporary jobs only led to temporary income and the economy as a whole wasn't repaired enough to give many of those unemployed full-time jobs by this point a new issue was starting in the Great Plains farmers had over produced crops to compensate for increased demand back in the Great War and that meant a massive increase in farmland as the 1920s went on demand dropped and farmers found themselves with empty fields by 1934 drought had struck and as crops died farmers lost land and money soil had dried up and turned to dust a massive wind storms picked up the dust and sent it sweeping over the countryside covering everything in you know dust appropriately called the Dust Bowl the results of this only further worse than the depression as crops died and farms disappeared many traveled across the nation looking for work I'm sure all of you Steinbeck fans already knew that so by 1935 it was apparent the New Deal wasn't the grand success many hoped for to combat this came the second new deal with a whole new range of programs most famous of which was the introduction of social security at the same time taxes were increased for the wealthy with a nearly eighty percent rate on the richest man in the nation john d rockefeller after this round of changes it was apparent the program wasn't a grand success and a recession caused even more issues in 1937 while the New Deal had given a to many across the country it was apparent that it would not be enough to get the economy back on its feet what did actually end the depression was war as world war ii broke out industry was more important than ever and jobs were in constant demand and a smart move price wars were replaced with government contracts with set prices this meant nobody would take a loss and instead production would benefit the government and the contractor factory work was essential and there was absolutely no shortage of these jobs available more jobs meant more spending on products which were sold by corporations this meant corporations had more money which in turn meant more jobs could be made and those new employees had money to buy products from you guessed it corporations this would be the clear-cut answer to ending the Great Depression and soon economic woes turned into a grand age of consumerism in post-war America so there you have it after a decade of economic despair it took the biggest conflict of the 20th century to bring back economic stability of course in the end the issues and effects of the Great Depression are being heavily simplified here the depression was global but discussing the effects of each nation would keep us here for a very very long time so that's the Great Depression at least in America the story of how optimism turned into depression which turned into optimism kind of this is Cody of knowledge of

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Keywords: The Great Depression, Depression, AlternateHistoryHub, KnowledgeHub, What caused the great depression, economic collapse, great depression history, world war II history, history

Id: BurFT68G_DQ

Length: 10min 20sec (620 seconds)

Published: Mon Apr 03 2017