The Great Depression In The 1920's

The Great Depression was the most catastrophic and impactful economic downturn in the United States industrialization world's history. Although it originated in the United States, the Great Depression caused drastic declines in output, severe unemployment, and acute deflation in almost every country of the world. The beginning of the depression was followed by the end of the Roaring Twenties. “While living in the Roaring Twenties looked extremely glamorous, 40% of Americans still lived in poverty throughout the decade. The rich and lavish lifestyle was mainly enjoyed by those who could afford it” (www.historic-newspapers.co). “The Great Depression that began at the end of the 1920s was a worldwide phenomenon. By 1928, Germany, Brazil, and the

It also led to Americans losing all consumer confidence, which was a complete redirection from the 1920’s which was the peak of consumerism. It damaged the market and companies terribly, causing production to slow down and the unemployment of a vast amount of workers. Fast forward a year later to March of 1930, when another 1.5 million people were unemployed. The current U.S President at the time, Herbert Hoover, tried to assure Americans that the crisis would run its course and end its lasting effects within sixty days. Americans quickly learned this was far from the truth as matters began to get worse and unemployment numbers continue to rise. Shortly after, Americans experienced the “Dust Bowl”, which “would soon become the worst drought in 300 years, with Hoover originally asking the American Red Cross to support those in need. Later on, as things got worse, Congress provided $65 million for food boxes, seed and feed for farmers”

It demanded banks to liquidate their loans in order to have sufficient funds to allocate to the mass amount of cash deposit orders. “Bank runs swept the United States again in the spring and fall of 1931 and the fall of 1932, and by early 1933 thousands of banks had closed their doors” (history.com). Hoover and his administration tried to assist the failing banks and institutions with government loans, in hopes of them then using those to create loans for business which would create employment. On December 11th in 1931, “The fourth largest bank in the United States, the Bank of the United States, failed, causing the biggest failure in a bank at the time. President Hoover then brought the top income tax rate up to 25% as he was concerned about budget deficits. When the bank collapsed, it had more than $200 million in deposits, which made it the largest bank failure in the history of the United States and was one of the most hard-hitting events during the Great Depression”