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Great Depression Story

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The Story of the “Great Depression” “Once I built a railroad, I made it run. made it race against time. Once I built a railroad; now it's done. Brother, can you spare a dime?” That was the lyrics of “Brother, can you spare a dime” One of the most known songs of the “Great Depression” era. The song wonder and ask why the people who built the country through farms, buildings and railroad find themselves standing in breadlines starving abandoned begging for charity just to fed their kids. It was October 29 1929 (Black Tuesday) the most devastating crash in the history of the United States stock market. Many will argue that the great depression was caused by the crash of the stock market. which is considered as a huge mistake that leads people …show more content…

It all started with the beginning of the flourish years of the 1920s. The number of the U.S. banks started to grow immensely from 1887 until 1921 much of the increase coincided with improving economic conditions. A good portion of the increase resulted from statutory changes that allowed the minimum capital to require to form a new bank as well as a care less application of entry standard by regulators. The growth in numbers of banks was much faster than the pace of economic growth. In other words, too many banks were formed without proper financial or managerial resources. Therefore the banking market was over banked. It was also a big bubble in the banking industry that was built to burst at any time. During the early 1920’s bank deposits were uninsured, making banks typically hold only a fraction of deposits in cash at any one time and then lend out the rest to borrowers or purchase interest bearing assets like government securities. During bank run, a bank must quickly liquidate loans and sell its assets often a rock bottom price to come up with the necessary cash and the losses they suffer can threaten the bank solvency. Bankers were started simply by rumors or a banks inability and unwillingness to payout funds. A vivid example would be what happened in December of 1930, when the New York Times reported that a small merchant in the …show more content…

economy. This terrible act intensified nationalism all over the world. This act added poison to the emptying well of the global trade. The world wide protection of the 1930’s took decades to dismantle and terrible monetary and fiscal policies were at least based on the economics orthodoxy of these days. Therefore, international trade promptly and predictably crashed in more than 20 countries, imports and experts fell at least by double digits between 1930 and 1931 with an average decline for more than 77% (Refrecne) according to data from the national industrial board in the United States Exports collapsed 37% while imports fell by 32% which lead to a very hug trade deficit and then transformed the depression to other countries and the economy started to shrink with each successful year. As middle class Americans stood in the same lines previously graced only by the nations poorest, the entire fabric of the United States was forever

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