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Great Depression Research Paper

Great Depression Research Paper

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Published by danielu13

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Published by: danielu13 on Aug 28, 2009
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Underwood 1
 The Great Depression: The Extensive Effects The 1920s was a time of roaring prosperity. Even mid-October of 1929,the average middle-class American saw an “illimitable vista of prosperity” (). The thought of poverty was close to an end; in 1928, President HerbertHoover stated, “We have not yet reached the goal, but given a chance to goforward with the policies of the last eight years, and we shall soon with thehelp of God be within sight of the day when poverty will be banished fromthe nation” (). The prescience of the end of poverty became known as theAmerican Dream; however, this foresight was shortly lived. On Tuesday,March 26, 1929, the Hoover Administration saw the largest stock marketcrash of their administration to that date. Several months later brought BlackMonday, the largest stock market crash in American history and the cardinalcause of the Great Depression. The Great Depression is one of the singlemost important events in the financial history of the United States and theworld; the effects of and leading to the Great Depression lasted for severalyears. The Great Depression was an economic deficit with worldwide effectsthat began with the stock market crash of October 1929; the most profoundeffect of the Great Depression was the highest rate of unemployment inAmerican history: banks, factories, and stores closed, leaving millions of Americans jobless with no money. Without money, many Americans had torely on either the government or donations from charities to be obtain food;as the depression continued, however, the Roosevelt administration created
 
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government agencies to aid in supplying Americans with food, relieving theeffects of the Great Depression, preventing a catastrophic event like it fromoccurring again (). The group of people most affected by the Great Depression and theevents it instigated were the American stockholders; thousands of stockholders lost large sums of money due to the rapid decrease of stockvalues caused by the crash of Black Monday. Although this was a huge loss,predicting it was impossible; from 1925 to 1929, the average stock price of acommon stock on the New York Stock Exchange more than doubled, causingmany people to make large investments in the stock market in hope of making large profits. Even people who had no prior knowledge of the stockmarket or how it worked attempted to invest in anticipation of profits.Economists, such as Irving Fisher, assured stockholders that they were“dwelling on a permanently high plateau of prosperity ()”. This, along withthe assurance of many other reporters and professionals, cause thepopularity of being a stockholder to skyrocket: in 1920, there were only29,609 stockholders; a mere ten years later, there were 70,950.Stockholders’ ignorance of how the stock market worked soon turned againstthe thousands of investors in America and spread throughout the rest of theUnited States, halting economic flow (). The Depression had a remarkable effect on the United States; however,the United States was not the only place to feel the consequences of theGreat Depression: Canada was also profoundly affected (The Global Effects of 
 
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the Great Depression 1). Previously, Canada’s economy relied on the exportof grain and other raw materials. The people who exported these goodssuffered huge losses after other countries increased tariffs on importedproducts. Following the closing of many Canadian companies, theunemployment rate in Canada rose from three percent in 1929 to twenty-three percent in 1933 ().Other governments were affected by the Depression as well. As theDepression was at its zenith in 1933, the only country hit as hard as theUnited States was Germany (). Approximately six million individuals inGermany were left unemployed. Many aspects of German life led to thesedespondent times. Most prominent were the reparations Germany was stillpaying from World War I. Chaos arose in Germany after the war, causinghyperinflation in 1923; Germany was just recovering when the stock marketcrash hit (Effects on Germany 1). Another factor in the economic downturnwas the German government. Germany suffered a series of poor leaders; thechancellors of 1932, as Herbert Hoover said, were unable to deal with theeffects of the deepening Depression. On January 30, 1933, Adolf Hitlerbecame the chancellor of Germany (). The leadership of Hitler, one of the keyfigures in the relief of the Great Depression both in Germany and worldwide,marked the foundation of the collapse of the Great Depression. The actions beginning in 1933 aimed at relieving the Great Depressionin the United States and Germany had a major influence on other nations,particularly Great Britain (). Great Britain, unlike the United States, had a

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