The economy of America of entered a recession in 1929 when the spending of the consumers declined dramatically as well as the unsold goods started piling up with slowing production. Consequently, the stocking prices went on rising which nearly reached the levels that could not be justified by the year 196. In fact, by the year 1929, the stock market prices reached a level which could not be justified when the investors began dumping their shares. Nevertheless, it reached Black Thursday when nearly 12.9 million shares were dumped as well as 16 shares being dumped on the subsequent black Tuesday. Billions of shares got dumped, and the investors went at a great loss. The great depression resulted in suffering of American, and the president who served during this period had to come up with brilliant solutions to save their countries economy.
The causes of the Great Depression
The first verge of the Great Depression was signaled in the year 1929 when there was a crash of the New York Stock Exchange. In fact, this marked the worst economic crisis in the history of the United States of America and the period lasted nearly until 1941. This period got a number of people with disbelief as the stock market began spiraling downwards. Many economists recognized the plummeting prices as a confirmation of a severe economic crisis. However, at around the year the 1920s, United States of America began prospering, and many American people got employed as well as the country began producing industrial goods like appliances, automobiles, and furniture. Another cause of the Great Depression was the lack of national economic planning and a watchdog agency during the 1920s and this also contributed significantly as well to the Great Depression. The U.S presidents by then also failed to gather and analyze any statistics that would help in pointing out the increasing stock investing and agricultural overproduction products problems as well as the consumer goods. In fact, some economists might have pointed out this failure of the government to be the most significant cause of the Great Depression (Foner 2013).
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Furthermore, "get richer quick" mentality was also a significant contributor of this Great Depression. During the year 1920s, the majority of the Americans strongly believed that their economic fortunes were nearly around the corner, a belief which resulted in mass production of industrial goods, massive media advertising in newspapers and magazines as well as the exotic of silent films which were aiming at telling tales of success and richness. The "get rich quick" mentality led to lavish expenditure in the United States of America by that time with the hope of resembling the glamorous movie stars. Other factors which were recognized to have led to the Great Depression include chronic agricultural overproduction as well as the reduced prices for farm goods. Besides, overproduction of the consumer commodities by manufacturing companies and accumulation of wealth in the hands of a few individuals are also the factors which contributed significantly to Great Depression. Consequently, the structure of American industry and business was characterized by many large holding firms as well as the investors' speculation of purchasing stocks with the supposition of always getting a profit which in many cases went in the opposite causing Great Depression (Fischer 2005).
The effects of Great Depression to the American worker and their families
The Great Depression impacted the American workers and their families in several ways by placing the socio-economic and psychological constraints and demands on the workers and their family members. The workers of various ethnic, racial and backgrounds showed a number of marital and family-style relationships which responded in different manners due to the effects of the Great Depression. In fact, during the year 1933, the average family income had dramatically fallen by 40% as compared to the average family income in the year 1929. In the year 1930, several workers and families lost their savings following the collapse of several financial institutions. These workers and families became unable to pay for their liabilities like mortgages which led to deprivation and eviction of their homes and apartments. in fact, both the middle-class and the working-class families were adversely affected by the Great Depression. This crisis was described as the family deprivation and disorganization since it caused marriage rates to decline which generally decreased birthrates. The number of divorce cases went down due to an inability of the families to be able to pay lawyer fees (Foner, E. (2013).
Many perspectives of family stories emerged due to resilience and the ability to face adverse economic circumstances as well as adapting to such conditions. However, some workers and families escaped the effects of the Great Depression since they were able to maintain their lifestyle and living standards. The major positive impact of the Great Depression was the legacy of economic security and well-being which became a national goal to everyone in the United States of America after the Great Depression. This legacy was later impacted by the government new deal which discriminated against women and the blacks giving a lot of emphasis to the Whiteman. Consequently, during the year 1930, the federal government tightened up economic policies by putting a lot of emphasis on the education, health, and housing saving the American from suffering such crises again (Green 1992).
The response of the American Government to the Great Depression and what President Franklin Delano Roosevelt did
The American government responded to the Great Depression crisis by laying appropriate measures to care for the immensely affected families. Initially, the United States of America implemented the string of isolationist economic policies which were aiming at closing the country off from the international communities. However, this measure did very little to save the Great Depression crisis, and it only continued worsening the situation thus costing Herbert Hoover significantly in his reelection bid. Later on, the Hoover's opponent, Franklin Delano Roosevelt, was elected as the new president of the United States of America and took office in January 1933. Franklin Delano Roosevelt immediately put a lot of emphasis in reviving the economy of the United States of America by taking the country off the gold standards, a measure which was meant to tie the American dollar to a certain amount of gold to allow more currency into circulation. This measure would increase inflation to greater heights on a long term basis, but on a short term basis, it would put more money into the United States ailing marketplace (Fischer 2005).
Franklin Delano Roosevelt instituted as well a host of the public works projects which financed the new government agencies with the money with the aim of putting the Americans economy back to normal as well as building the infrastructure in the country at the same time. Many agencies with such varied acronyms were formed, and they include the WPA, FHA, FDIC and the SEC which even made people call the Roosevelt "alphabet soup" agencies. Consequently, in the international trade, Franklin Delano Roosevelt, re-engage the economy of the United States of America to foreign powers. Furthermore, Franklin Delano Roosevelt created the Import-Export Bank with the aim of regulating the international trade with other western countries. He also made it very simple for the foreign countries to trade with the United States of America by signing several trade treaties in the 1930s with nearly 19 different nations (Foner 2013).
What President Hoover did to save the situation?
The presidency of Herbert Hoover was affected so much by the Great Depression crisis. Herbert Hoover and other economic experts thought that the depression could be part of the passing recession and by the year 1931; it became very clear that the excessive speculation and the Great Depression had plunged the country into the verge of economic crisis. Herbert Hoover even wrote to the Emmerson and talked about the "considerable continuance of destitution over the winter." Herbert Hoover tried acquiring the machinery of the country into action by working tirelessly to fix the economy, but his efforts bore no fruits. Herbert Hoover formed several government agencies which encouraged the labor harmony, businesses, and fostered cooperation amid the government's economic agencies with the aim of stabilizing the countries prices. Furthermore, Herbert Hoover supported the local aids for the public works and struggled to balance the country's budget. In fact, Herbert Hoover's works aimed primarily at indirect relief from the individual states as well as the private sectors based on his letter to the Emmerson on the support of every state committee (Fischer 2005).
The President Roosevelt’s promise to the people regarding the New Deal
President Roosevelt's ideas of open society became a new vision for liberty for the American people during his First Inaugural Address and his New Deal address. This gave the Americans hopes and confidence for the future. Between the years 1933 and 1941, President Roosevelt's programs and policies were seen as the best since they helped in adjusting the interest rates, created short-term work programs and tinker with the agricultural subsidies. These programs and policies resulted into the brand new and political coalitions which were characterized by the white hard working people, left-wing intellectuals and the hard working American intellectuals. These people could hardly share similar interest rates as well as thinking they did, however, their primary agenda was to share a powerful belief that could impact positively for the government interventions in averting the Great Depression. President Roosevelt’s programs and policies as far as the New Deal was concerned bound the people together with regards to social security, federal agricultural subsidies and unemployment insurance. President Roosevelt gave people the hopes and confidence for bright future by telling them that the forces of organizing money were undivided in their detestation for him and that he could welcome their abhorrence through the aggressive fight against the individuals who were taking advantage of the Great Depression situation to benefit them (Foner, 2013).
The consumers' hopes and confidence got vanished during the wake of the stock market crash crisis. The Great Depression got characterized by the downturn in spending and investments that resulted in the slowing down of factories production as well as production which led to the firing of workers. However, those workers who were lucky to retain their jobs, the wages fell dramatically which led to decline in buying powers. This made the majority of the Americans to buy based on credit terms as resulting into steady climbing of numbers of repossessions and foreclosure. Nonetheless, the adherence of the gold standards measures tied the countries of the word to a foreign currency which in turn helped to spread the crisis of Great Depression to the whole world.
References
Fischer, D. H. (2005). Liberty and freedom: A visual history of America's founding ideas (Vol. 3). New York: Oxford University Press.
Foner, E. (2013). Give Me Liberty! An American History: Seagull Fourth Edition (Vol. 1) . New York: WW Norton & Company.
Green, H. (1992). The Uncertainty of Everyday Life , 1915–45 . University of Arkansas Press
