The fall of the Stock Market in 1920 started a string of developments that drove the United State towards its innermost and prolonged financial catastrophe known to man. It would be easy to say that the stock market fall was the main cause that led to the Great Depression. If there had been a strong economy, we could have returned from such a disaster. There were several things that sent us into descending desperation. To start companies in America made great earning in the 20s and turned around and put that money back into expanding. U.S. History. (2008). The Great Depression. Retrieved from: http://www.ushistory.org/us/48.asp
In 1929 business had broadened so much that they were at a standstill, employees couldn’t advance in funding more growth and a halt was imminent. The wealthiest 1% of Americans possessed more than 1/3 of American goods, most of them usually kept their money instead of reinvesting back into the economy, instead of dispersing it amid the working-class citizens. Being that the middle class had already pulled their credit to its limits from buying vehicles and furnishings for their homes on extended payment plans. U.S. History. (2008). The Great Depression. Retrieved from: http://www.ushistory.org/us/48.asp
There were crucial architectural flaws with the American economy. Financial institutions worked with no security for the clients which constructed a sense of great alarm when things were rough. Banks did not have much supervision and were loaning money to those who bought into stocks carelessly. Farming had already taken a hit and left farmers incapable of any type of restoration. As the Depression increased and crossed over the Atlantic, Europe purchased less of our goods and that made the Depression even worse. When Hoover took office, he was not able to bring adequate support to this period of hardship and his reputation took a dive even more as most citizens no longer were gainfully employed. U.S. History. (2008). The Great Depression. Retrieved from: http://www.ushistory.org/us/48.asp
When Roosevelt took office he really had no idea how to tackle the mess the United States was in, so he decided the best way were the three R’s: Relief, Recovery and Reform. The relief would come by taking prompt response in trying to stop the economies decline. An immediate holiday for the financial institutions was declared so they could try and get a handle on the terror in most Americans minds. The Emergency Banking Act was established to put a stop to all members withdrawing their money from their accounts. President Roosevelt tried to reassure Americans that is was much safer to keep their money in banks than under their mattresses at home. Social Studies Help Center. (2001). How did Roosevelts New Big Deal go about fixing the problem of the Great Depression. Retrieved from: http://www.socialstudieshelp.com/lesson_86_notes.htm
Now time for the recovery “pump – priming” was a band aid solution for businesses to reestablish progress of customer need. The Agricultural Adjustment Act or AAA placed a tariff on food producers returning it to farmers as refund due to not producing food this caused inventory to drop which increased prices. Home Owners Loan Corporation provide accommodations for home owners to pay their loans, so they were not going to be homeless and helped banks not lose more business and get into worse shape than they already were. Social Studies Help Center. (2001). How did Roosevelts New Big Deal go about fixing the problem of the Great Depression. Retrieved from: http://www.socialstudieshelp.com/lesson_86_notes.htm
Lastly reform was long lasting plan to bypass more bleakness and put to ease America on further financial catastrophes. The Securities and Exchange Act Commission or SEC was a stable company that would audit stock business and protect us from extortion, scams and conspirator transactions that might take place. Federal Deposit Insurance Corp or FDIC was invented to protect those putting money into their financial institutions. In the beginning they were protected for up to $5000 per patron currently it has been raised to protect patrons to $100,000. Social Studies Help Center. (2001). How did Roosevelts New Big Deal go about fixing the problem of the Great Depression.
References:
U.S. History. (2008). The Great Depression. Retrieved from: http://www.ushistory.org/us/48.asp\
Social Studies Help Center. (2001). How did Roosevelts New Big Deal go about fixing the problem of the Great Depression. Retrieved from: http://www.socialstudieshelp.com/lesson_86_notes.htm
