The Great Depression

What happened to the US in the 1930s?

How it all Happened:

To start with, the economy did not just fail because of the Wall Street crash. It took World War I, farming surplus, using credit, the stock market crash, & more. After World War I, the USA demanded the repayment from France & Great Britain. France & Great Britain demanded the repayment from Germany, who was blamed for war. The president of the US, Calvin Coolidge was asked for forgiveness in war dept. His response was, “They borrowed money didn’t they? They need to repay it.” The dept hurt the US economy. After World War I, farmers had a huge surplus. Farmers kept growing crops for the war but when it ended, no one wanted to buy any more food. They already had loads of food. And since the supply is much bigger than the demand, prices dropped phenomenally. This hurt not only farmers, but the economy. Another reason is buying goods with credit. People bought new idems such as washing machines, the automobile, refrigerators, radio, & other things. The problem was people bought goods with credit. Credit means buy now pay later.They also bought stocks with loans, thinking they could pay later. People bought stocks hoping to get rich quick. And then they would pay when they were rich. As people bought stocks, the market was steadily rising. But if the stock market fell, the people who used credit and loans would be in trouble. And they would have to still pay back the money. The stock market was troubling & people worried, but the new president, Herbert Hoover said everything will be fine & there was no need to worry. But there was really something wrong with the stock market & the economy as a whole. On a Thursday, October 24, the downturn started. JP Morgan stabilized the stock market by adding money to it. Sadly, the fix did not last long enough & Morgan was not able to fix it this time. On Tuesday, October 29, the greatest amount of money was lost from the stock market. To make matters worse, investors panicked & rushed to sell stocks, but no one wanted to buy them. Banks closed down when people could not pay loans back. People made it worse by rushing to banks, thinking their money was safe to withdraw. By the end of 1932, more than 5,000 US banks failed. Bussinesses started to lay of workers, then closed. Soon the unemployed spread all around the country. And all comes down to Herbert
Hoover.

Herbert Hoover:

Herbert Hoover plays an important role in this economic crisis. Well in history he is important but to people he is hated. Herbert Hoover was one of the US presidents during the Great Depression. Herbert Hoover’s name means failure. Even though the Great Depression took years to happen, Hoover was at fault. Hoover believed that offering too much help was wrong. So Hoover did very little things for the economy. And everything he tried either didn’t work or completely backfired. He passed the Harley-Smoot Act, thinking when foreign goods were higher in price, people would buy more American goods, boosting the economy . It completely backfired. And it hurt the economy even more. Another time, in the Midwest, farmer used poor farming techniques to plant crops which dried the soil. The wind picked up the dust & blew them across the plains, starting
the Dust Bowl. Even though nature & farmers who caused the Dust Bowl, since Hoover, didn’t even do anything, he was hated even more. Also, a threatening “Bonus Army” attacked protesters & took two mens lives. But soon, just as he was about to run for president again, his competitor is going to change everything.

Franklin D. Roosevelt & the New Deal:

Franklin D. Roosevelt (FDR) is the grand finale. He helped improve the economy. He was the president after Hoover. Unlike him, He started helping immediately. He created the New Deal which is full of programs that gives families a job. Like the Tennessee Valley Authority (TVA) which builds dams, provides electricity, & produced fertilizer. It also produced jobs for the people. The Civilian Conservation Corps (CCC) employed young men & were sent to camps to slow down erosion, plant trees, and constructing fire towers. By the end of the year 1933, the CCC employed more than 250,000 men. Didn’t solve the whole situation, but it showed that FDR was trying. Agriculture recovery was a key to fixing the economy as well. To fix this, FDR started the Agriculture Adjustment Act (AAA). The purpose was to fix surpluses & to reduce the amount of crops & livestock. Farmers were paid to plant only a certain amount of crops & the government bought slaughtered livestock. The Works Progress Administration (WPA) employed thousands in its first year. The WPA builds schools, post offices, hospitals, bridges, etc. Finally men got some jobs. Some programs didn’t work, but like FDR said, they were going to keep trying & trying until the task is done. There are more programs; I just listed some of them. FDR helped the economy grow but the Great Depression really ended when WWII started. Thanks to him, we have the US we have today.