The Great Depression was a period of economic disaster for the United States. The beginning of this period is often related to the crash of the stock market in 1929. At its lowest point, in 1933, it is estimated that 33% of all non-farm workers were unemployed (Smiley, 2008). While this is a period that is often remembered with homelessness and unending bread lines for citizens just to get a meal, it was also the start of federal programs begun to help the underprivileged.
With the crash of the stock market, the nation's banks felt a significant loss, due in part to the loss of investments. This loss was then passed on to the citizens. Houses and properties were then foreclosed on and many ended up homeless. Businesses were not safe from this disaster, they also closed up their shops, leaving more unemployed and eventually homeless. Citizens that had invested money in the market found themselves completely broke. An estimated $140 billion was lost by citizens that had deposited their money in banks by 1933 (Wattenberg, n.d.).
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The United States was not the only country touched by this disaster. Foreign trade was affected by the lack of items being exported and by the lack of purchases of imported items. The decline of the Unites States economy had a worldwide impact. As banks collapsed all over the world, there was an abundance of items that countries had made or grown that they now had no market to sell to. Prices for goods fell and trade was significantly impacted.
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The collapse of the stock market is often associated with the beginning of the period known as the Great Depression, however; to fully understand the cause, the previous ten years would need to be understood. There was a huge boom in the stock market in the 1920's. It was also a time of great industrial expansion. Investor's flocked to invest their money in what was seen as a secure way to expand on one's savings. Banks and private companies also got in on the action of investing. Foreign trade was profitable. It seemed as though most were making money prior to the collapse of the stock market. This economic boom followed by a catastrophic crash left devastation in its wake.
References:
Smiley, G. 2008. Great Depression. Retrieved from:
Wattenberg, B. n.d. Stock Market Crash. Retrieved from:
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