Herbert Hoover And The Great Depression

Austin Harrison 1 The Great Depression is a tragic event in American history where the economy had faltered from a variety of sources, as described by historians. The cause that most early Americans assumed was the sole inducer of the depression years is the Stock Market Crash of 1929. This thought of the direct correlation between the crash of the stock market and the Great Depression was challenged when later scholars linked that the "consumer demand could no longer keep up with production, the nation's weak banking system and unregulated securities markets of the 1920s" had been the real cause of the depression period, though it is still up to debate. (WATTS) The event began with the United States president Herbert Hoover in the years leading up to the Great Depression. Before the depression, the 1920s had been a prosperous time for the American economy, and in 1929 the newly elected president Herbert Hoover had inherited a strong economy. This prosperity changed with the stock market crash later the same year he had taken office, on the October of 1929.(Government)

Their reasoning was that the economy was strong enough to return to its former glory if given enough time. Within a year or two later, in 1932, unemployment had escalated above 23 percent without any sign of a halt in the deterioration of the country's economy. This was the point in which Hoover made the choice to enact the Reconstruction Finance Corporation that of which "made more than $1 billion available to business in the form of loans." This program, at the time, was the "...largest peacetime spending program in American history."