| Final Test Essay
The 1929 crash is the most devastating crash ever known in the United States history, considering the duration of its fallout and its full extent. Since 1920, markets in most of the US and Europe were gaining constantly, recording large gains year after year. The more the gains, the more the money attracted into the market. Between 1927 and 1929, many stocks doubled and others tripled. The increasing wealth attracted more investment capital into the market. People started borrowing large amounts of money and invested in the share markets with high hopes of getting rich due to the increasing share prices (Gerald 2010).
However in 1928 the economy started slowing down, and the demand growth flattened out; profits were now not doubling anymore; the demand for loans eventually exceeded the availability of deposit. Cash flow from banks and mutual funds started drying down, and the big investors started withdrawing, leaving the more optimistic smaller investors that were already trading on borrowed margin. Slowly, huge losses started to be realized. Many investors decided to leave the market in order to cut losses, making this trend more pronounced. The entire wealth that people had painstakingly invested for year disappeared overnight.
The stock market crash began in the Black Thursday, 24th October 1929, when investors sale of new orders led to the market tumbling down. On this day, more and more investors exit at whatever price they could get. The mob outside the stock exchange turned violent. Conclusively, the attempt by the media and important people is one of the primary causes of the crash. Secondly, the expansion of holding companies, public utility, investment trusts as well as the amount of margin buying all fueled the purchase of public utility stocks, pushing up their prices. Those factors triggered the event. The crash led to a serious economic depression.
The depression had extremely serious implications on the US economy; Over a period of four years, from 1929 to 1933, production at the US mines, factories and utilities declined by more than half. The Americans disposable incomes dropped by twenty eight percent; stock prices collapsed to reach one-tenth of their height before the crash. Additionally, the number of unemployed Americans shot up from 1.6 million in 1929 to 12.8 million in 1933. One in every four employed citizens lost his job. By 1933, 11,000 of the 25000 United States banks had already failed due to reasons such as defaults on loans, declining property values and banks being run by panicking |ers.
The dust bowl, also known as dust thirties was a period characterized by severe dust storms that caused significant agricultural and ecological damage to the Canadian and American prairie lands from 1930-1936. The situation was caused by drought accompanied by years of extensive farming without crop rotation, cover crops fallow fields and other techniques of preventing erosion. Drought, which was a lack of snow and rain, had lasted for seven years which made the land drier and drier Secondly, the area lacked native grasses.
For centuries, the area had been a prairie where only tall grasses grew. Their roots grew far down into the soil and tangled with each other, therefore, holding the soil into place. However, when the prairies were turned into grazing land and farmland, the native grasses with their tangled roots seemed worthless, were ploughed under and crop seeds planted on their behalf. Without rain to moisten the soil and roots to anchor it, the dirt eventually turned into dust. When the giant windstorms swept through the land, they carried away rich but dry top soil.
During the drought, the soil dried, turned into dust and blew away southwards and eastwards in large dark clouds reaching all the way to the East Coast cities such as Washington and New York. Much of the soil was carried by prevailing winds, which were partly created by the dry and bare soil conditions and finally deposited in the Atlantic ocean. Millions of acres were rendered useless for agriculture and hundreds of thousands of locals forced to leave their homes. The drought hit the hardest an area bordering five states namely: Oklahama, New Mexico, Colorado, Kansas and Texas.
Most of the families, mostly from Oklahama, migrated to California and other states whose economic conditions were slightly better during the Great Depression. The 1930 dust bowl would last for about a decade. The agricultural devastation caused by the bowl helped lengthen the depression. Small-scale farmers were ruined; they did not have any cash crop to harvest in the fall. A large number of families were left without money, without food and often without hope. As a result, many other businesses also failed.
The New Deal was a series of the economic programs implemented in the US between 1933 and 1936.They were passed by United States Congress during President Franklin Roosevelts first term as responses to the Great Depression. The Deal represented a radical shift in domestic and political policy in the US. The New Deals most lasting changes were increased federal government regulation of the economy. It marked the beginning of the growing power of labor unions and complex social programs.
In my opinion, the main feature of New deal was programs that addressed Rural Electrification Administration and the Resettlement Administration; rural welfare projects sponsored by NYA, WPA, Forest Service including opening roads in remote areas, building new schools, purchase of marginal lands to expand national forests and reforestation. This program also involved the launch of Tennessee Valley Authority (TAA), a project that involved dam construction in order to counter flooding menaces, generate electricity and modernize poor farms. This is so because true prosperity could not return if farming was not thriving.
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