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Great Depression

The Great Depression began in October 1929, when the stock market in the United States dropped rapidly. Thousands of investors lost great deal of money and many were wiped out, lost everything. The decline caused the Great Depression. In the period longest and worst period of high unemployment and low business activity took place. Banks, stores, and factories were closed and left millions of people jobless and homeless. Many people came to depend on the government or charity to provide them with food.

The Great Depression did not begin in 1929 with the fall of the over inflated stock market. In fact the Depression began ten years earlier in Europe. As the depression raged on in Europe American's believed they would be immune to its effects. As a result American polices never addressed the possibility of the United States entering a depression as well.

The early warning signs first came in the agricultural sector. Farmers continued to produce more and more food due to technological advances like the tractor. As production grew farm prices dropped. It was simply a matter of supply and demand. Framers reacted in the traditional manner and boosted production even further. Prices increased. Farmers began to default on their loans and the banks closed. To make matters worse the central part of the nation was hit with a terrible drought. Farmers were devastated."

Banks that had invested heavily in the stock market and real estate lost their depositors money. A panic ensued as people lined up at the banks to get their money. Unfortunately for many the money just wasn't there. As the amount of money in circulation dropped deflation hit. Money was worth more but there was little money to be had. The fed which had the power to put more money into circulation did nothing (laissez faire). Workers were fired as thousands of businesses closed down.

Unemployment rose to 25-35%. In Toledo Ohio fully 80% of the workers were unemployed. Real estate investments flopped...