What Led Up To The Great Depression

The 1920s were a glamorous post World War I time, sex was the national pastime and gin was the national drink. On the morning of October 24, 1929 the American stock market crashed and changed thousands of lives permanently. A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles. (History) With the decline of stocks led to millions of Americans rushing to the bank to withdraw their money, overall leading to the ultimate “crash” or shut down of the whole system. All money was placed in the bank or stocks was lost

The Great Depression was the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1939. It began after the stock market crash of October 1929, which sent Wall Street into a frenzy and wiped out millions of investors. Over the next several years, consumer spending and investments halted, causing steep decrease in industrial output and employment as failing companies due the the fact workers were laid off. By 1933, when the Great Depression reached its lowest point, some 15 million Americans were unemployed and nearly half the country’s banks were closed until further notice.

In 1935, Congress passed the Social Security Act, which for the first time provided Americans with unemployment, disability and pensions for old age. After showing early signs of recovery beginning in the spring of 1933, the economy continued to improve throughout the next three years, during which real GDP (adjusted for inflation) grew at an average rate of 9 percent per year. A sharp recession hit in 1937, caused in part by the Federal Reserve’s decision to increase its requirements for money in reserve. Though the economy began improving again in 1938, this second severe contraction reversed many of the gains in production and employment and prolonged the effects of the Great Depression through the end of the decade. Depression-era hardships had fueled the rise of extremist political movements in various European countries, most notably that of Adolf Hitler’s Nazi regime in Germany. German aggression led war to break out in Europe in 1939, and the WPA turned its attention to strengthening the military infrastructure of the United States, even as the country maintained its neutrality (History). With Roosevelt’s decision to support Britain and France in the struggle against Germany and the other Axis Powers, defense manufacturing geared up, producing more and more private sector jobs. The Japanese attack