Gál Anna Dóra (OJVEDD), Response paper, U.S. History II.

Topic 10: The 1920s, The new deal and world war II.
The Great Depression

In this paper I am going to write about the one of the most known historical event of the
history, the Great Depression. The Great Depression was a servere worldwide economic
breakdown that lasted from 1929 to 1939 and was precipitated by a significant drop in stock
values in the United States. It began with the October 1929 stock market crash, which threw
Wall Street into a hysteria and burned out millions of investors. Consumer spending and
investment fell over the next several years, resulting in sharp drops in industrial output and
employment as faltering companies laid off workers. By 1933, when the Great Depression
had reached its climax, 15 million Americans had lost their job,and nearly half of the
country’s banks had failed.
But how could this happen? The United States’ economy increased fast throughout the 1920s,
and the country’s overall wealth more than doubled between 1920 and 1929, a period known
as The Roaring Twenties. The Roaring Twenties were a time of significant social, economic,
and political transformation in American history. For the first time, cities outnumbered
farmland in terms of population. This economic engine pulled many Americans into rich
consumer culture, in which individuals across the country saw the same advertising, bought
the same items, listened to the same music, and danced in the same ways. Unfortunately,
many Americans were uneasy with this racy urban lifestyle, and the decade of Prohibition
produced more strife than pleasure. However, for some, the Jazz Age of the 1920s raged loud
and long, until the excesses of the Roaring Twenties came crashing down when the economy
collapsed at the conclusion of the decade.
During the Great Depression, the stock market, which was headquartered on Wall Street in
New York City and was focused on the New York Stock Exchange,was the site of wild
speculation, when everyone from billionaire industrialists to waiters and maintenance staff put
their savings into stocks. As a result, the stock market exploded, reaching its high in August
1929. By that time, output had already begun to fall and unemployment had grown, leaving
stock prices far higher than their true value. Furhtermore, wages were low at the time,
consumer debt was on the rise, the agriculture sector was failing thanks to weather and
declining food prices, and banks had an excess of huge loans that could not be discharged.
The American economy experienced a moderate recession in the summer of 1929, as
consumer spending slowed and unsold goods began to pile up, slowing factory production.
Nonetheless, stock prices continued to increase, reaching parabolic heights by the fall of that
year that could not be supported by predicted future income.
However, in 1932, with the country stuck in the depths of the Great Depression and many
people were out of work, Democrat Franklin D. Roosevelt won the presidental election by an
enormous majority. At the end of the fourth wave of banking panics, every U.S. state had
forced all remaining banks to close by Inauguration Day, and the the U.S. Treasury did not
have enough cash to pay all federal employees. To adress the country’s economic troubles,
Roosevelt took quick action, first declaring a four-day sort of bank vacation during which all
banks would close so that Congress could approve reform legislation and reopen those banks
considered to be strong. He also began bringing up the public over the media, such as in radio,
with series of speeches, and these so called fireside chats went a long way toward restoring
public trust. Roosevelt’s government issued legislation targeted at stabilizing industrial and
agricultural production, creating jobs, and stimulating recovery during his first 100 days in
office.
When the Great Depression began, the United States was the only industrialized country in
the world that did not have any sort of unemployment insurance or social security. In
1935,Congress passed the Social Security Act, which for the first time provided Americans
with unemployment, handicap, and old-age pension benefits. The New Deal, as Franklin D.
Roosevelt’s first two terms were known, became a moment of hope and optimism. Altough
the New Deal era saw the endurance of the economic slump, the darkest days of sorrow
appeared to have passed.

Sources:
Great Depression | Definition, History, Dates, Causes, Effects, & Facts. (2022, August 23).

Encyclopedia Britannica. Retrieved October 23, 2022, from

https://www.britannica.com/event/Great-Depression/Political-movements-and-social-

change

President Franklin Delano Roosevelt and the New Deal  | Great Depression and World War

II, 1929-1945  | U.S. History Primary Source Timeline  | Classroom Materials at the

Library of Congress  | Library of Congress. (n.d.). The Library of Congress.

Retrieved October 23, 2022, from https://www.loc.gov/classroom-materials/united-

states-history-primary-source-timeline/great-depression-and-world-war-ii-1929-1945/

franklin-delano-roosevelt-and-the-new-deal/