The late 1920’s and 1930’s was a time of depression in America. This depression was caused by overproduction and America's sudden boom in the economy. America's rise in the economy led to Americans buying on margin for stocks and buying luxury items with credit. Eventually, the stock market crashed and people lost their life savings. Since they had no money they couldn’t pay back these luxury items and businesses failed. This resulted in problems including, bank failure, unemployment, and the economy crashing. FDR and others were then forced to try to solve these problems, so they created the New Deal.
One of the major problems of the Great Depression was unemployment. Finding a job was merely impossible and earning high wages was even more scarce. Document 2 is …show more content…
Bank failure was a result of the stock market crash of 1929. When the stock market crashed, people flooded to the banks and demanded their money back. Banks then gave as much money as they could back but when they couldn’t repay any more people, they closed the bank and ignored the majority of people left. Document 1 is about the stock market crash and the effect it had on banks. Document 1 states, “Disbelief turned to panic as people stormed the banks trying to withdraw their life’s savings — often too late.” This shows how serious the stock market crash was, it wasn’t just one problem, it created many. Bank failure became a huge problem once people realized they had lost all their money. FDR fixed this problem by declaring a bank holiday, which is when all banks are closed for a certain amount of time. He then announced that only the banks in best shape would be allowed to reopen, this helped the problem because banks that had no money were closed, and the public began to trust banks again. Overall, bank failure was a result of the stock market crash but was a huge problem by itself. Eventually, FDR fixed the problem by having a bank
One of the major problems of the Great Depression was unemployment. Finding a job was merely impossible and earning high wages was even more scarce. Document 2 is …show more content…
Bank failure was a result of the stock market crash of 1929. When the stock market crashed, people flooded to the banks and demanded their money back. Banks then gave as much money as they could back but when they couldn’t repay any more people, they closed the bank and ignored the majority of people left. Document 1 is about the stock market crash and the effect it had on banks. Document 1 states, “Disbelief turned to panic as people stormed the banks trying to withdraw their life’s savings — often too late.” This shows how serious the stock market crash was, it wasn’t just one problem, it created many. Bank failure became a huge problem once people realized they had lost all their money. FDR fixed this problem by declaring a bank holiday, which is when all banks are closed for a certain amount of time. He then announced that only the banks in best shape would be allowed to reopen, this helped the problem because banks that had no money were closed, and the public began to trust banks again. Overall, bank failure was a result of the stock market crash but was a huge problem by itself. Eventually, FDR fixed the problem by having a bank