Nightmare Without Hope: The Great Depression

Nightmare Without Hope: The Great Depression

The 1930s was the dark time for Americans. The combination of natural disaster, economic crash, and racial unbalance put the society in suffering. As the deepest economic downturn, the Great Depression had a huge effect on America as well as the world. The Depression started with the stock market collapse and ended at the World War II. During the years between, high unemployment rate, gloomy society, and racial problems are like endless nightmares haunted in America.

The Great Depression officially started on Tuesday, October 29, 1929, which is called “Black Tuesday”. That was the day on which the stock market crashed, reducing the value of stocks in corporations and utilities by billions of dollars (“Black Tuesday”). Several years before the crash, American economy had shown some unhealthiness. Workers’ lives improved rapidly in the 1920s. They started to use the payment to buy things. They were over-optimistic about the economy and borrowed heavily. But in fact, they were not able to pay back the loans (“Black Tuesday”). For the stock market, more and more investors bought stock on margin, that made the prices keep increasing. The bubbles of stock market formed (“Black Tuesday”). During the autumn of 1929 the stock market became erratic, and on October 24, 1929, people suddenly tried to sell stocks they thought might be overvalued. A frenzy erupt occurred, and that day was called “Black Thursday” (“Black Tuesday”). The following days the market rebounded a little but that was shorted-lived. Economic bubbles burst completely on Black Tuesday. Banks were ruined when loans could not be repaid; there was not enough money available for building homes and businesses; companies started to lay off employees and cut wages; unemployed or underpaid workers could not pay back loans that further crippling the nation’s banks. The country was trapped in a vicious cycle. Public lost faith in the economy (“Black Tuesday”).

In order to alleviate the economic misery, the 31st American president, Herbert Hoover urged the Federal Reserve to make it easier for businesses to borrow and urged businesses and labor leaders to maintain employment and wages (“ Herbert Hoover”). In an attempt to help protect American industries, Hoover recommended increasing tariff to help industries. Nevertheless, that sparked a trade war and directly caused the decline of American exports. Most economic historians believe the tariff helped deepen the depression. Those policies were evidently considered wrong or insufficient (“ Herbert Hoover”).

The Depression not only caused many economic problems but also left deep emotional scars on the American psyche. Many Americans wanted to be rewarded for working, but the downturn of the economy didn’t allow them to do so. They had to live on welfare aid and they thought that made them worthless.