Stock Market Crash
Though the stock market crash of 1929 was not the sole cause of the Great Depression in the United States, it did play a large factor in banking failures and public fear. The crash began on October 24 when the market opened with an 11% drop in market value, however, businesses stepped in with bid above market value which seemingly fixed the drop. But, two days later this bounce back proved to be illusory. The stock market had been overpriced and overbought and the false increase was due to bidders buys higher than usual instead of letting the excessively bullish market come to a plateau. The stock market had climbed too high and crashed hard.
Bank Fails!
After the Stock Market Crash of 1929 people rushed to banks to claim their money; but, banks had used their money to invest in the stock market and to give out small loans. So when hundreds of thousands of people withdrew all their money at once, the banks didn’t have enough money to pay every person their money. Once the banks ran out of money they were forced to declare bankruptcy. They bank was then forced to close its operations and since money at that time was uninsured people who didn’t have a chance to withdraw their money they lost it all.
Dust Bowl
The Dust Bowl was the name given to the Great Plains region devastated by drought in 1930s America. The 150,000-square-mile area, encompassing Oklahoma, Texas, Kansas, Colorado, and New Mexico, had little rainfall, light soil, and high winds, a destructive combination. When drought struck from 1934 to 1937, the soil lacked the root system of grass as an anchor, so the winds easily picked up the loose soil and swirled it into dust clouds, called “black blizzards.” Recurrent dust storms wreaked havoc, choking cattle and pasture lands and driving 60 percent of the population from the region. Most of these people went to agricultural areas first and then to cities, especially in the Far West.
The New Deal!
The New Deal was a series of programs enacted in the United States between 1933 and 1938, and a few that came later. They included both laws passed by Congress as well as presidential executive orders during the first term (1933–1937) of President Franklin D. Roosevelt. The programs were in response to the Great Depression, and focused on what historians refer to as the “3 Rs,” Relief, Recovery, and Reform: relief for the unemployed and poor, recovery of the economy to normal levels, and reform of the financial system to prevent a repeat depression. Many New Deal programs remain active, with some still operating under the original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System and the Securities and Exchange Commission (SEC).
Published: Apr 18, 2016
Latest Revision: Apr 18, 2016
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