Essay on The Great Depression

Submitted By jasonrab
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Pages: 4
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Jason Rabinowitz
US History 2
Kamps
Period: 13
Data Based Question
The Great Depression There were many causes to the great depression but more than anything, it was a result of bad decision making by Herbert Hoover. His lack of experience and logical thinking translated into the worst breakdown in American economic history without question. Luckily with America having been through this crisis, the known causes can be used to make sure it never occurs again. These causes consisted of the stock market crash of 1929, bank failures, reduction in purchasing across the board, and drought conditions and sandstorms better known as the “dust bowl”. To begin, the stock market crash of 1929 was a huge blow to American economy. When all stockholders suddenly sold all of their shares for whatever it would sell for, stocks dropped in price dramatically in a short period of time. Businesses, being partially owned with these stocks, are now worth much less, and the stock market officially crashes down. This has a snowball effect in itself because it leads to rich people instantaneously becoming broke and they are the ones expected to pay workers. As shown in document B, every man has the potential to earn and invest in common stocks to make retirement a “set for life” type of system. This potential is what becomes ruined by the stock market crash. The effect is that the average working man can no longer invest confidently in their future. Investing in stocks now became an all or nothing bet, compared to roulette or a horse race in document E. A large group of these wealthy people who were investing all of their money are also business owners or have people working for them in some type of way. This loss of money instantly translates into the loss of jobs and lower wages and eventually high rates of unemployment all caused by this crash. Furthermore, Bank failures completely eliminated the idea of living the American dream. The idea that one can work hard and provide for their family and have the freedom to spend where they want is suddenly gone when their money disappears. Since the government does not back up banks like they do later on, lots of hard working people lose their money because the banks can not pay them back. The one place people are encouraged to store money for their future is now the most dangerous place for it. This is one of the things causing people to abandon their homes and live in small makeshift houses known as “hoovervilles” for his lack of ability to help America out of the depression which is shown in Document F. Veterans would be the most effected by this because their whole life was spent on making sure the future of America as well as themselves would be in a good position for the future, many of them have now lost their money from these bank failures that put the government in a hole, which, in turn, made these veterans angry enough to march in Washington which is shown in document L. Next, reduction in purchasing across the board caused many businesses to fail. People are not living on much, so they cannot afford to buy anything but the essentials needed for their family. The majority of businesses seen today are selling mostly unnecessary items, which goes to show most businesses are not getting any business. The trickle down effect of rich people having less to
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