Fearing that banks would close, customers lined up to withdraw their money. Since banks rarely keep enough cash on hand to pay all their customers at once, many banks shut down. The Great Depression was the time of great economic hardship, had begun. As banks failed or cut back on loans to businesses, factories produced fewer goods and there... ... middle of paper ... ... not return until United States entered World War II in 1941. After World War I, the price of food began to drop causing some dramatic effects on the United States economy.
Most of the nation’s banks also failed because they had to put the depositors money in the stock market to increase but when it crashed people lost most of their money. Many people started to lose faith in the stock market and “you can’t have a healthy economy without confidence in the market.” When banks and businesses started to close many people became unemployed and then people can’t afford food for themselves or for their family. People started to take loans from banks but then couldn’t repay the banks and the banks couldn’t let their depositors withdraw any money because it is all gone or given for loans. From the start of the depression the United States economy was going down day by day. President Roosevelt had closed all the banks for three days and then some banks opened backed up with strict limits on withdrawals.
The Great Depression like the Drought hit America really hard. The depression led to massive unemployment and bank failures, while the drought targeted family’s homes and agriculture, making it harder to raise crops in the Great Plains region for quite sometime. Both these events took a lot out of the American people and forced the President to make tough decisions in how to approach these disasters. Although this had a negative affect on the United States, the pain was soon alleviated with the action taken by President FDR, creating programs to get Americans out of this slump. These events shaped America and influenced a nation to respect its leadership.
The stock market crash of 1929 was a major turning point in history. It was an event that struck The United States hard, effecting both political and social groups. During the Stock Market Crash; banks were forced to shut down, people lost their entire savings they had in the banks, and upon losing their savings from the banks they eventually lost their businesses. Therefore causing a downward spiral in the economy of The United States and creating havoc. The Stock Market Crash of 1929 was a time sorrow due to loss of trust in the banks.
When the stocks crashed the unemployment rate went from 9% all the way up to 25%. They estimated that about 15 million people lost their jobs because of the great depression. The banks had to shut down because people would take out all of their money from the banks and since people did that, the banks had no money to give to their people and would have to shut down which caused some people to lose all of their money they had in the banks. About 9,000 banks went of business because of this and people that had a savings account lost everything in it, there were more than 9 million savings accounts were wiped out. Throughout the great depression banks failed.
There were many elements that led to the Great Depression like the stock market crash, bank runs, the dust bowl, and the new deal. The Great Depression was an economic downturn between 1929-1939. Many people lost their jobs and did not have enough money to keep a roof over their head. Only the rich could manage while the unfortunate grieved. Both the rich and poor were petrified, and the rich even concealed their money so no one could take it from them.
With the banks making loans to people to invest in stocks, when the stocks started to crash there was a large amount of panic selling causing a great many numbers of businesses that when bankrupt. All of the closing of businesses made a great many people unsure of the volatility of the market. This made people want to make sure their money was safe by taking it out of the bank. Due to the stock crash people started not being able to pay back the money they got from loans from the banks. With the banks relying on the circulation of money and people not needing all of their money all at once, the banks started to go bankrupt as they did not have enough money to give back everyone the money they have in the bank.
A banking crisis then swept across America, as the confidence of the American public fell. In 1929, 659 banks failed due to unpaid loans. As a result people stopped trusting banks and withdrew their savings. This in turn led to more banks failing. People in agriculture were hardest hit by the Depression because the 1920’s had not been kind to them anyway.
The year 1920-1941 was an era of destitution in America. Even if the 1920’s were recognized as period of prosperity and new technology, the poverty that followed was unimaginable. The situation affected all types of people regardless of skin color and social status. When the banking system collapse people stopped spending in fear of loosing everything, because of this business owners had to reduce production as well as workers, as a result many lost their job and suffer in deep poverty. The seen of starving children and desperate parents on a street has become common.
It put millions of people out of work, and made people homeless and hungry. Food and job lines were nearly endless in the cities. The Great Depression was a horrible time for most of Americans. Many people lost their jobs and a lot of businesses closed. This job loss forced many Americans to becoming migrant workers.