How Did The Great Depression Affect American Society

Ms. Hale

AP U.S. History

June 4th, 2018

How did the Great Depression affect American society?

Throughout American history, the people have experienced a series of ups and downs with their government and economy. However, the Great Depression that began in 1929, and its largely negative impacts on society were the ones that forced the government to begin harsher regulations on businesses for the welfare of the people. Due to the problems of the twenties, the lack of government interference, the government was forced to create the New Deal in order to rebuild the broken society and struggling economy. The Great Depression contributed to the toll on society that then led to the formation of the New Deal. .

Prior to the Crash, America was experiencing

Harding’s term, he establishes a “return to normalcy,” with the laissez faire system of letting businesses control themselves. This policy led to overproduction in agriculture and over speculation on stocks. One of the most commonly events that is associated with the start of the Great Depression was the Stock Market Crash of 1929. In John Kenneth Galbraith’s book, He hypothesizes that the crash of such powerful market was largely a result of over speculation and the common American Dream belief that purchasing a stock would automatically bring good results. Galbraith writes, “The tickers also fell nearly two hours behind the market; Radio dripped 23 points, and New York paper began its accounts of the day’s events, ‘Wall Street’s Bull Market collapsed yesterday with a detonation heard around the world.’ (Galbraith 15). The crash on what was known as Black Tuesday, brought upon one of the greatest rates of poverty in American historty On October 29 of 1929, the commonly called “Black Tuesday” was the day that marked the downfall of the American stock market. The crashing caused a nationwide panic where people “rushed to sell all the stocks they had in hand. Since everyone was selling and no one was buying, stock price collapsed. Even banks started selling the stock they had ... over 16.4 million shares of stock were sold in one day. It continued for the next days, and the price kept dropping. In fact, the drop continued over the next two years. On

“FDR used the Depression crisis to break the untamed bronco of let-’er-rip, buccaneering, laissez-faire capitalism that had gone unbridled since the dawn of the industrial revolution in America more than a century earlier. He and his fellow New Dealers invented new governmental institutions like the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC), and the National Labor Relations Board (NLRB) to bring stability to the historically shaky banks, the casino-like stock exchanges, and the often violently tumultuous world of labor relations.” (Kennedy) The programs instituted were known as the Alphabet Soup, with their shortened abbreviations as simply alphabetical letters. The reformers of the time created many “other institutions as well, including the Federal Housing Authority (FHA) and the Federal National Mortgage Association ("Fannie Mae") to make mortgage lending more secure, thereby unleashing the money and the energy that made a majority of Americans homeowners and built the suburbs of the Sunbelt after World War II. They passed the Fair Labor Standards Act, abolishing at last the scourge of child labor and establishing minimum wage guarantees. Most famously, with the Social Security Act of 1935 they erected a comprehensive system of unemployment and old-age insurance to protect laid-off workers and the elderly