The Great Depression

5 Pages 1193 Words

Before going into the subject of The Great Depression I would like to talk bit about money, the term money basically has two different types of meaning. We often speak of someone “making money,” when we really mean that he or she is receiving an income. Money is a term referring to a flow of income or receipts per week. Often times we also speak of someone having money in either his or her pocket, safe-deposit box or on a savings account. Under these conditions, money refers to an asset, as well as an item on a profit and loss statement. (Money Mischief, pg 8)

The late 1920’s were a decade of economic boom. New houses and apartments were created, and the nation’s capital expanded. At the beginning of 1929, the unemployment rate was at a low 3.2 percent. But as that eventful year unfolded, increasing signs of economic weakness began to appear. Unemployment went up to 25 percent and the Real Gross Development Product (GDP) declined at 29 percent. (Macroeconomics, pg 376)

Prior to the stock market crash, the nation was relishing in a state of jubilation. Confidence levels were elevated and the stock market was up. Everybody seemed to be making a fortune by speculating in the stock market. Between August and September 1929, almost 1.1 billion transactions were made (NEEDS CITATION). But in actuality, most people in the country did not have the extra money to invest in the market. Those few that did invest increased their buying power by borrowing money (The Great Depression pg 31). However, as banks and businesses reacted to cut costs or declared bankruptcy, unemployment rose at an alarming rate. Relief organizations were quickly overwhelmed and unemployment offices were swamped with applicants. Meridel Le Sueur was a young writer who wrote an article about what it was like for women seeking work in an employment office. She describes the frustration and humiliation of proud people waiting all day for jobs t...