March 30, 2011

Effects of the Great Depression

The effects of the Great Depression took its toll on the health and welfare of the United States. Systematic bank failures, a credit crunch, and a crashing stock market, all contributed to the fall from a standard of living that millions of Americans had taken for granted. Unemployment hit over 25% as factories and industry cut back on production. Falling stock prices throughout the decade, had already put pressure on Farmers profit margins. With shuttered businesses, crop prices fell even more throughout the Great Depression, forcing many farms into foreclosure. As Credit became scarce, Businesses were not able to raise capital for expansion. Mass lay offs both in the private and public sector, left the Majority of American people, bewildered and confused. Roughly 1 in 4 Americans lost their entire life savings. Poverty rose as many Americans found themselves standing in long breadlines to get a meal. Many owners of automobiles, could not afford gas and would pull them using mules. These were named after the President, known as "Hoover Wagons.

Americans Who Benefited

The Great Depression period also included Americans who profited greatly from the stock market collapse and economic turmoil. Men like Bernard Baruch would "short" the market, increasing the value of their position as the market fell. The duration and severity of the Stock Market fall during 1929-1932 created opportunities for a market operator to take a position short selling. Jesse Livermore was said to be worth $100 million dollars after the market crashed in 1929. The President during the great depression was Herbert Hoover. Americans wanted to see results, accountability, and opportunity again. President Hoover pressed for an inquiry into the short selling as a cause of the market fall. In the end, it turned out to be much more complex than just heavy short selling. The fall also was a result of bank issues securities that ended up being worthless. This over leveraging of the market, was the ingredient necessary to have such a steep sell off that resulted in the great market decline. The effects of the Great Depression lasted for years on families.

President Hoover had adamantly spoken out against poverty in his inauguration speech, and know his name was becoming synonymous with it. As the market bottomed out, new leadership was assembling in Washington on March 4th, 1932 - President Franklin D. Roosevelt's Inauguration day. The real life Effects of the Great Depression left millions of Americans feeling so despondent and desperate, they were deeply and psychologically in need of a leader that could breath life back into their souls. They were willing to work hard to bring the U.S. back to prominence, they just needed to believe. As Roosevelt was sworn in, the country held its breath, listening to a new leader take charge.

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