Eagle Times Bulletin

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The Great Depression: A World Calamity

Emily Oxley, Writer

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From 1929 to 1939, America experienced a painful calamity known as the Great Depression. It all started when the stock market crashed in October 1929, sending Wall Street into a panic, wiping out investors’ wealth.

During 1930 autumn season, the first of four waves of bank panics began, forcing banks to liquidate loans to supplement their insufficient cash reserves on hand. These bank runs swept the United States again during the spring and autumn of 1931 and autumn 1932, resulting in thousands of banks closing and thousands of people furloughed. Facing this dire situation, Hoover’s administration tried supporting failing banks and other institutions with government loans so that banks in turn would loan to businesses and rehire their employees.

As consumers’ confidence vanished during the stock market crash, a decline in spending and the slow down in investment led factories and other businesses to curtail their production and begin furloughing their workers. Forced to buy products on credit, many Americans fell into debt, which made foreclosures and repossessions climb steadily. The gold standard, which joined countries around the world with a fixed currency exchange, helped spread economic poverty in the United States and throughout the world, especially Europe.

In 1932, with 15 million people unemployed and experiencing the Great Depression’s wrath, Democrat Franklin D. Roosevelt won an overwhelming, presidential election victory. During his first 100 days in office, his administration passed legislation that aimed to stabilize industrial and agricultural production, create jobs, and stimulate recovery. Moreover, Roosevelt created the Federal Deposit Insurance Corporation (FDIC) to protect depositors’ accounts and the Securities and Exchange Commission (SEC) to regulate the stock market and prevent abuses that led to the 1929 crash.

Depression-era hardships had fueled rising extremist, political movements in various European countries, most notably that of Adolf Hitler’s German Nazi regime. As European tensions grew, Roosevelt decided to support Britain and France, producing more private jobs, helping American industries thrive. When the Japanese attacked Pearl Harbor on December 7, 1941, leading America into World War II, it brought the nation back to full production mode and ended the United States ‘ Great Depression.

The Great Depression–a sad chapter in humanity’s history, yet one that teaches a valuable lesson.

 

 

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The Great Depression: A World Calamity