Essay Sample on the Great Depression

Introduction

After a steady rise in the American stock market from the early 1920s, the peak was arrived at in the summer of 1929, before it all came down crashing in the wake of 1930. This resulted at the beginning of the great depression as it came to be known. Stock markets suddenly began a rapid decline in what came to be known as the "Black Monday," taking the world by surprise even though evidence suggests that there had been an indication of the crash coming soon. It is yet to be known whether the crash could have been prevented or not, though leading economists purport that it would have been possible ("Stock Market Crash Of 1929 | Summary, Causes, & Facts"). Several factors would be blamed for the occurrence of this economic meltdown, some of which were looked at in this paper.

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Even though no single cause was pointed to as triggering the economic meltdown, Economists the world over agree that several compounding factors were to blame. Sudden loan interest hike by the Federal Reserve for example to tighten credit combined by widespread speculations among the public and huge unlequidatable bank loans played the most prominent roles in triggering the market crash ("Stock Market Crash Of 1929 | Summary, Causes, & Facts"). This was further compounded by the economic recession that had begun earlier in the summer of 1929, which did not help much in stabilizing the economy as it fell. As a result, the federal government had little control over the events that followed. Heavy borrowing by the public to invest in the booming market no doubt created large deficits in banks and the Federal Reserve, creating room for the meltdown to occur ("What Caused The Stock Market Crash Of 1929?").

Following the stock market crash of 1929, the great depression began in the following year. Dubbed the worst economic depression in the history of the United States, it was to last for almost a decade, with widespread ramifications all across the world. Chief among those was the rise of extremism in Germany, which would culminate into the Second World War in 1939 ("Stock Market Crash Of 1929"). Even though several policies and mitigation measures were instituted in the years that followed, the US economy never really recovered up until the beginning of the World War2, when industrial production was revitalized, boosting the economy even more than it had been before and improving the lives and lively hoods of the American citizens once more. Just like the stock market crash that preceded it, there was no single cause to blame for the onset of the Great Depression, but a combination of several factors both at domestically and internationally. Chief among those however was the economic meltdown that had preceded its onset the previous year. Bank failures throughout the years that followed also contributed to its progression as people lost their life savings through uninsured deposits and surviving banks also refused to lend out anymore. High trade tariffs instituted by the government after the start of the depression also worsened the situation as foreign trade dwindled after that. Furthermore, fears of the situation worsening made people afraid to purchase things and as such lowered the purchasing power across the nation, leading to a fall in industrial production which in turn increased unemployment further worsening the already bad situation (Charles, 1977).

Following the onset of the Great Depression, the government instituted several policies to end the situation. Franklin Roosevelt, for example, made the New Deal policy upon his election into office in 1933. This was perhaps his most notable domestic legislation during his time in office. The deal introduced 42 agencies aimed at fighting the great depression among them the Securities and Exchange Commission, Federal Deposit insurance among others, which served to safeguard people's investments and therefore create jobs for the workers who had lost their jobs ("How FDR Beat The Great Depression"). It is not clear if the policies really did much to ease the depression, but unemployment progressively declined until the beginning of the Second World War.

Conclusion

With the introduction of government policies aimed at easing the depression, the government roles changed significantly as it now held the role of security insurer in the economy to prevent such an occurrence ever happening again. Oversight authorities were introduced by the government to watch over different sectors of the economy, making it easier to monitor trends and prevent the circumstances that led to the situation in the first place. The government also took a more direct role in providing jobs for its public to reduce the employment rates as had occurred and eased the dependency on private companies for the provision of large sections of the population. The Franklin Roosevelt administration also introduced the Keynesian Theory of economics to help regenerate the economy, giving the government more control of the economy than it had before.

Works Cited

"How FDR Beat The Great Depression." The Balance. N.p., 2019. Web. 12 Apr. 2019.

"Stock Market Crash Of 1929 | Summary, Causes, & Facts." Encyclopedia Britannica. N.p., 2019. Web. 12 Apr. 2019.

"Stock Market Crash Of 1929." HISTORY. N.p., 2019. Web. 12 Apr. 2019.

"What Caused The Stock Market Crash Of 1929?." HISTORY. N.p., 2019. Web. 12 Apr. 2019.

Levitt, Theodore. "The globalization of markets." Readings in international business: a decision approach 249 (1993).

Charles, H. Boston, the Great Depression and the New Deal. New York: Oxford University Press, 1977.