Great Depression Dbq

During 1929 to 1939, the United States suffered from the Great Depression, a severe financial and industrial recession. The depression is defined as a continuous decline of the economy over an extended period of time that often leads to great consequences. The major reasons as to why the Great Depression occurred would be due to speculation within the stock market and and the overproduction of products and crops from WWI. Speculation is the act of quickly purchasing and selling stocks in order to earn the most money. During this time period, people had borrowed a large amount of money from banks in order to purchase stocks to make money. This caused the inflation of stocks that led people to believe that stocks were actually worth more than

they actually were, causing them to place more money into the stock market. However, when a scare occurred, people began to sell all of their stocks quickly, resulting in the crash of the stock market, causing everyone to lose all of their money, a day also known as Black Tuesday. People were then also unable to repay banks for the money that they had previously borrowed. On the other hand, mass production of products and crops to sell to other countries during WWI was a great form of income for Americans. During WWI, the farmers had borrowed a great amount of money from banks to buy machinery and supplies to grow crops. When the war ended, they were then left with a large quantity of products that were no longer needed, forcing farmers to sell their crops as extremely low prices. This resulted in the farmers not earning a profit from their crops, causing them to be incapable of paying back the debts that they owed the banks.

Ultimately, these two incidents caused the banks to go bankrupt, diminishing the financial standings of the entire country. Then in 1928, Herbert Hoover was elected president of the United States, plunging the country into greater crisis. Hoover believed in rugged individualism, where the people of a country should not rely on their government for assistance during a time of distress but should instead look to themselves for a solution to their problems. He also believed that a country had natural cycles, that the economy would decline and naturally return to a state of prosperity on its own. Hoover’s ideology proved to be unsuccessful, so in 1932, Franklin Delano Roosevelt was elected the new president, one that believed in the “try anything” approach, setting into motion the New Deal that provided reform, recovery, and relief to our country. The New Deal brought the Great Depression to an end through rebuilding the banking system, providing jobs to the high number of unemployed, and creating programs to provide opportunity and assistance to

everyone.
Roosevelt solved the first issue of the Great Depression by solving the crisis of which farmers had overproduced during WWI and were not left with a surplus of crops that are of low value. In order to resolve this problem, FDR designed a program known as the Agricultural Adjustment Administration where farmers were paid to stop producing crops. This was a form of reform that was successful in once again increasing the price of crops while still allowing farmers to be able to live off of the money provided to them from the government.
FDR then proceeded to reforming the banking system of our country which improved our economy when people began to put money into banks again.

Roosevelt first closed down all banks for a short period of time, restocking the banks with enough money to reopen and provide money for those that were in desperate need, then he created the FDIC program that restored the trust that people had in banks through guaranteeing that even if a bank went bankrupt, the government would be able to insure that all of the money people had placed into their bank accounts would be returned to them. As the banking system began to stabilize, people were able to gradually participate in normal spending and safe loaning of money from banks, once again creating a healthy flow of money within the

country.
Although many believed FDR’s New Deal to be a success, others believed that it was a failure due to the increased amount of debt accumulated from reforming the country. In the time period of approximately 12 years, the United States had more than doubled their amount of debt. According to Document 3, the US government had 16.9 billion dollars of debt in 1929 and ended with about 44 billion dollars of debt in 1941. Therefore, the relief provided by the New Deal was merely a failure that had only plunged the country into a disaster that would take even longer to recover from.
All in all the New Deal was a success since it assisted the United States in recovering from the Great Depression. Although it had costed the country a lot financially, it was worth it since as long as the country contained a constant healthy flow of money, it would be able to recover from its debt over time. The steps taken by the New Deal were necessary and successful in ending the Great Depression.