Wk# 8 Causes & End of the Great Depression

I was wrong! I always remember hearing that the great depression was caused by the stock market crash of 1929, yet there were many other factors which led up to this moment. The 1920’s marked a time in history when people were gaudy, and enjoied the new luxuries of life. Material items were purchased on a system of credit which proved to be dangerous. Another important contribution was the agricultural sector. Due to the world war one, farming had expanded to many places across america in order to meet the high demands of food for soldiers overseas, hence at that time farms and factories were over producing goods, this increased availability of food meant that prices were low so low that some farms foreclosed due to lack of revenue. There was also other signs of economic weakness like the decline of car sales. Although these signs were most definitely contributors of our failing economy, I think that the real cause of the great depression was the weak banking system. At that time the the federal reserve was in existence although many banks were small individual banks which relied on their own resources. A wave of bank failures occurred when depositors came to withdraw their money before banks were in danger. As a result, banks needed to sell any assets and call in loans ultimately putting a pause on credit as there was less money in circulation. It seems to be that the real start of the great depression could be attributed to 1930 when unemployment began to skyrocket. In 1930s, unemployment continue to grow and grow reaching about 30% unemployment rate. People would travel across america looking for work, yet it still did not prevent the need of people asking for government assistance, standing in breadlines, or living in shantytowns.

The response to the great depression came from president roosevelt and his New Deal. Having won the presidential election in 1932, America was in desperate need of hope which is what President Roosevelt provided. The New Deal was basically a set of government programs which intended to ameliorate the damaging effects of the Great Depression and prevent future depressions from happening. There were three broad categories for these programs, Relief- which provided more immediate response through money for those in need,  Recovery- which tried to fix the economy in the short run while providing means of employment, Reform- which was created to prevent future depressions. Immediate programs created aimed to curtail unemployment such as the Civilian Conservation Corps, Agricultural Adjustment Act, Public Works Administration, Tennessee Valley Authority, Agricultural Adjustment Act; yet this was not enough for many Americans leading to the establishment of the Federal Emergency Relief Administration to give a means of welfare. While these things took place there was another effort to establish longer term reforms such as the social security administration, and the wagner act which allowed workers the right to unionize.

Although the New Deal helped to end the Great Depression, It seemed to be that the actual end of the depression was the incidence of World War II which then called for military goods to be produced at a rapid rate, providing jobs for many Americans.