The Great Depression: A Time of Struggles
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The Great Depression
The Great Depression: A Time of Struggles
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The Great Depression was a worldwide economic shock that left millions of people unemployed, leading to empty stomachs and homelessness; impacting the United States and Canada the most. This huge economic downturn lasted ten years from 1929 to 1939 and began after the stock market crash of October 24, 1929, commonly referred to as “Black Thursday”. On this day, 12.9 million shares were traded and eventually became worthless as stock prices fell by twenty-three percent; resulting in destruction of confidence in the economy. Many investors were wiped out due to loans and as stockbrokers called in their loans, businesses fell. All of this led to many layoffs, and for those who were lucky enough to stay employed, wages fell and buying power decreased.
Although the market crash did help to jumpstart the depression, things were already looking grim before this. Author Kimberly Amadeo stated that according to Ben Bernanke, past chairman of the Federal Reserve, the central bank helped to create the Depression (Section 4). Amadeo stated in her article that the bank used tight monetary policies when it should have done the opposite and that Bernanke had highlighted its five critical mistakes which included things such as increasing the rate of federal funds during a recession that led to the stock market crash and not increasing the supply of money to combat deflation (Section 4). There was basically not enough money put into circulation to get the economy going again, allowing the total supply of US dollars to fall thirty percent. There is also the consensus that the Depression was also a result of widespread drops in world commodity prices along with sudden declines in economic demand and credit; therefore, leading to rapid declines in global trade and rising unemployment.
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As the economy kept receding, lives were becoming much worse; however, not everyone was affected the same way. The unemployment rate at one point was hovering around twenty-five percent, leaving much of the population in both Canada and the US in shambles with no source of income yet many of the rich families felt no real impact at all and were most likely oblivious to the damage the Depression had been causing. Divorce rates and birth rates dropped sharply as families could not afford to pay for anything. Many men who had lost their jobs ended up having to rely on their wives and in turn, this empowered the status of women, though it was still was a difficult time to live in. It really was just a time of struggling with poverty as everyone hoped that they would soon be on the road of recovery.
This road of recovery was finally ventured upon once Franklin D. Roosevelt was elected with the promise to create federal government programs to end the Depression. With Roosevelt’s “New Deal” in place, multiple agencies were created to make jobs for people and it did as was intended. Many people do argue that what really ended the Depression was World War II since the decision to help in the War opened many jobs and significantly decreased the unemployment rate; though the War itself may have had its roots in the Depression as the financial stress the Depression brought might have been what allowed Adolf Hitler to gain enough power and influence. But the War, along with Roosevelt’s New Deal, ultimately did end the Great Depression and freed many from those struggling times.