Numerous Americans suffered through the Great Depression. The main contributing factor to this catastrophe was the Stock Market Crash of 1929. Many Americans had invested their money into stocks because they assumed that they would benefit and profit greatly from it. By owning a stock, the investors would officially own part of the company. Unfortunately, the value of the stocks gradually decreased, which eventually led to a multitude of people losing their money. People then began trying to sell their stocks for what was left of its worth, but not many were able to accomplish this (Foner 764). Furthermore, as this occurred many Americans began quickly drawing out their money from the banks before they lost it all, but the banks did not have
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In addition, Americans purchased bonds, in which the investor would loan the company a large amount of money with the assumption that in a few years their business would be both lucrative and productive along with the company eventually returning the investors money back. Since the companies did not improve and only worsened, their business was worth hardly anything and the company was essentially not able to pay back the loans they received from the bonds. This left many citizens in poverty (Foner 764). By October 28, 1929, the panic officially began throughout America with the stock market closing down, which essentially led to Black Tuesday on October 29, 1929 (“Stock Market Crash of 1929”). The stock market crashing was essentially a major component that led to the Great Depression because various businesses became bankrupt, it deeply affected the economy, and several Americans became …show more content…
In essence, the stock market crashing played a major economic role in which the economy caused an enormous amount of people to go into poverty. After Herbert Hoover ended his Presidency, Frederick D. Roosevelt was elected the new President. During his presidency, there was still a banking problem and roughly one fourth of the banks failed. As soon as he became President, Roosevelt established a Bank Holiday. During the Bank Holiday, he closed the banks for several days and implemented the Banking Relief Act. This Act only reopened the banks that were in good condition. This was accomplished with the purpose to calm the people so that they would not continue trying to take out their money from the banks while panicking. Both Hoover and Roosevelt had distinct contrasting ideas. As stated before, Hoover believed in the Government staying out of an American 's personal life. However, President Roosevelt was convinced that in order to escape the Great Depression and to solve the Stock Market crash situation then it was necessary for the government to become involved within the Americans individual lives. To reassure the people, he addressed the situation to the public through fireside chats. By having these fireside chats, President Roosevelt was able to explain to the Americans his ideas of solving this economic crisis. In order to solve the situation, he began creating recovery and reform programs to
In addition, Americans purchased bonds, in which the investor would loan the company a large amount of money with the assumption that in a few years their business would be both lucrative and productive along with the company eventually returning the investors money back. Since the companies did not improve and only worsened, their business was worth hardly anything and the company was essentially not able to pay back the loans they received from the bonds. This left many citizens in poverty (Foner 764). By October 28, 1929, the panic officially began throughout America with the stock market closing down, which essentially led to Black Tuesday on October 29, 1929 (“Stock Market Crash of 1929”). The stock market crashing was essentially a major component that led to the Great Depression because various businesses became bankrupt, it deeply affected the economy, and several Americans became …show more content…
In essence, the stock market crashing played a major economic role in which the economy caused an enormous amount of people to go into poverty. After Herbert Hoover ended his Presidency, Frederick D. Roosevelt was elected the new President. During his presidency, there was still a banking problem and roughly one fourth of the banks failed. As soon as he became President, Roosevelt established a Bank Holiday. During the Bank Holiday, he closed the banks for several days and implemented the Banking Relief Act. This Act only reopened the banks that were in good condition. This was accomplished with the purpose to calm the people so that they would not continue trying to take out their money from the banks while panicking. Both Hoover and Roosevelt had distinct contrasting ideas. As stated before, Hoover believed in the Government staying out of an American 's personal life. However, President Roosevelt was convinced that in order to escape the Great Depression and to solve the Stock Market crash situation then it was necessary for the government to become involved within the Americans individual lives. To reassure the people, he addressed the situation to the public through fireside chats. By having these fireside chats, President Roosevelt was able to explain to the Americans his ideas of solving this economic crisis. In order to solve the situation, he began creating recovery and reform programs to