The Great depression was the worst economic crash in U.S. history. It started after the stock market crash on October, 1929. It sent Wall Street into panic and wiped out millions of investors. In turn, this led to millions of americans becoming unemployed, and nearly half of american banks had failed. Over the next couple of years, consumer spending and investment made a steep dive, so did the industrial output and employment rates. Many failing companies had no choice but to lay off their workers because they had no income. The stock market, located in New York City, On Wall Street, was the breeding grounds for reckless spending, where millionaires, people trying to get rich, cooks, poured their savings into stocks, hoping to get lucky and strike …show more content…
The agricultural economy was suffering from drought and falling food prices, and the banks had a overload of large loans that could not be liquidated. In the summer of 1929, America’s economy suffered a mild recession. Consumer spending plummeted and the number of unsold products increased, causing factories to slow production of the goods. As a result, stock prices rose so high that there was no way they could be justified by expected future earnings. By this time, people were performing bank runs, this meant that people were going to the banks and withdrawing all their money in fear of losing it when the banks shut down. This put a gargantuan hole in the already degrading economy. Things continued to worsen, even though President Hoover assured the people that this crisis would soon run its course. Meanwhile, America’s industrial production had dropped by half. Towns and cities were riddled with homeless people, and more and more people were unemployed, and there were endless lines of people going into breadlines, and soup kitchens. Farmers couldn’t afford to harvest their crops, leaving them to rot in the fields while people were starving