How Did The Great Depression Affect The Economy

The stock market crash of 1929 negatively affected millions of Americans by decreasing the economy, turning millions of money into nothing, hurting our agriculture, and doubling the unemployment rate. It was an austere time for Americans as they tried to find jobs to sustain their families, and it lasted for about a decade.
The stock market crash became known to everyone as the Great Depression, which started in October of 1929. The stock market prices were gradually dropping, and economic uncertainty finally won over Americans. The price of stock had dropping consistently throughout September, until October when some brokers decided to withdraw their shares. On “Black Thursday” about 13 million shares were sold. Then later on “Black Tuesday”
16 million more stocks were sold. The prices of stock kept on dropping as more people sold their shares, until many were selling for way less than what they paid for them. Many Americans had their life saving in the stock market, and had all of it virtually disappear. It was worse for others. Some people bought stock with borrowed money. This would only cause more problems in the upcoming years.
The Great Depression was hard for America in general, because the stock market crash lowered the overall economy of the U.S.
When Americans’ money was turning into nothing, spending in America took a steep decline. Big businesses had huge decreases in profit. Many people also lost their jobs and had no source of income, and no savings. Other countries were also affected. The U.S. was not exporting nearly as much as they used to. It created issues with commerce, countries that relied on the U.S. for goods had to find other ways to get those items. In order to fix this problem, FDR created his “New Deal”, a series of laws that were thought to fix the problem of the U.S. economy. He ended Probation which allowed the alcohol industry to help the economy. He also created the Social Security Act, which provided money for older Americans and those who were disabled or unable to
work.
The problem with the stock market crashing, was that people had lost a lot of their money. Many were not confident in banks safety and security. So many people withdrew all their money from banks. Banks did not have all their money, because people they loaned to had bought stock, which practically disappeared. So in order for banks to pay up, they had to liquidate loans and many banks were unable to remain open. This became known as “bank runs”. People would talk about their lack of confidence in banks, and then a day later, thousands of people would withdraw their money from the bank and force it to close. In just two years, nearly half of America's’ banks were closed. With many banks failing, or already closed, FDR declared a “bank holiday” in which every bank in America would close. He then gave money to banks that he thought would prosper, and had the other ones closed down. When the banks reopened in 4 days, he started giving “fireside chats” that encouraged Americans to put their money back in banks.
There were many problems with agriculture that arose because of the stock market crash.
Many farmers were in poverty from losing their money in the crash. But bigger problems were held at the price of crops. Farmers had been overproducing their crops, which consequently, drastically reduced the price of each crop. Many crops died without anyone to harvest them. Many farms were going out of business, so FDR created laws that would help the price of crops go up, and give money to farmers. The AAA or the Agricultural Adjustment Act gave money to farmers who lowered their production rate. Soon the price of crops went up and farmers were able to maintain a steady
income.
Perhaps the worst problem of the Great Depression was the unemployment rate. In a couple weeks after the initial crash, the unemployment rate doubled. It would only increase until the government stepped in. So many people lost their jobs and since Americans had no money, no one could afford to buy new things. Huge corporations couldn’t stay open, so they had to fire some of their workers. Also many small businesses closed due to lack of money. But FDR created many programs focused on giving jobs to the unemployed. The CCC or the Civilian Conservation Corp, hired citizens to build schools, airports, bridges, and other things that improved cites. The TVA or the Tennessee Valley Authority built dams to help with flooding across Tennessee. Not only did these programs provide jobs for Americans, they also created new structures in the process.
The Great Depression was one of the hardest times in American history. It negatively affected millions by decreasing the economy, making billions of money vanish in front of everyone, create agricultural issues, and double the unemployment rate. Though with perseverance and government funded programs, the U.S. was able to get the unemployment rate back down and provide income for many Americans.