The Great Depression Essay

2209 words - 9 pages

“No one can possibly have lived through the Great Depression without being scarred by it. No amount of experience since the depression can convince someone who has lived through it that the world is safe economically.” Isaac Asimov's is defined simply as terror and pain for all humanity that had to endure through the depression years. He states the fact that it was unpreperable and a shock (Isaac Asimov). This quote is symbolic of one of the greatest tragedies to ever strike The United States. Many call it the death of old American society and the birth of new era. The Great Depression was a worldwide economic downturn which started in October of 1929 and lasted through most of the 1930s. It was centered in North America and Europe, but had devastating effects around the world, particularly in industrialized countries and producers of raw materials. Cities all around the world were hit hard, especially those based on heavy industry. Unemployment and homelessness, which was scarce in the earlier years then more abundant than ever. Speculation in the 1920s caused many people to buy stocks with loaned money and they used these stocks as collateral for buying more stocks. The stock market boom was very unsteady, because it was based on borrowed money and false optimism. When investors lost confidence, the stock market collapsed, taking them along with it. The Depression affected American people in ways economical, political, and social and will always be remembered with an ill humor among all Americans for the rest of time.Our present day economy, though deep in debt, can be deemed relatively stable in comparison to the economy in the time of the Great depression. The American Heritage Dictionary defines economy as “the system of production and management of material wealth.” During The Depression the system of production was very minor and unprofitable, material wealth was a loaf of bread or any food you could put in your stomach to survive. Many people date the beginning of the Depression at October 24, 1929, “Black Thursday”, and the day the stock market crashed. This was indeed a traumatic day for those who owned stock as sales volume broke all records. But the decline in overall stock prices was only about 2.5%, from 261.97 to 255.39 as measured by the New York Times index of 50 stocks. Most of the decline still laid in the future. The market hit bottom on July 7 of 1932 when the Times index was only 33.98, a decline of over 89% from its high of 311.90 of September 19, 1929(Geoffrey H. Moore, page 40). To interpret this statistic, during the early stages of the depression only a small amount of shares which is the amount of money you can buy from the company, started to decrease. After the depression went into full throttle no one bought any shares which caused a loss of substantial amounts. During the next three years stock prices in the United States continued to fall, until late 1930's they had dropped to only...

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