The Great Depression

Essay by IamPrettyInPinkJunior High, 8th grade May 2005

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The Great Depressions was a hard time for newcomers in America. It was one of the worst times in American History. There were too many poor people, a surplus of production and unemployment was at an all time high. The government was having trouble getting the country back on track, but they were doing all they would.


It was the roaring 20's and while stock prices were low, Americans went on a buying spree. The economy was already weak from a surplus of agriculture and the withdrawal of the British Finacial investment after World War I, among other things. Americans were happy with their prosperity and thought it would never end. The domestic product rose 40% while income rose 30%. (Faragher, 371) Unemployment was low, income was high, and by 1929, nearly 60% of all families owned a car, which was a luxury at the time. (Ibid) Few noticed that things began to go downhill.

Farmers faced declining markets because of declining European markets. The stock market kept steady despite a minor glitch earlier in the decade, and the government encouraged low interest rates. Almost all farmers did not prosper from this spree due to dropping need of agriculture. Prices of produce dropped about 40% in 1920 and 1921, and remained low throughout the 20's. (World Book Encyclopedia, 339) Some farmers lost so much money that they could not pay the mortgages on their farms, therefore, loosing them.

Production rose about 50%, but buyers couldn't keep up, so there was a surplus of produce. (Ibid) Workers reduced their buying to hold down their debts and a national currency reduction only worsened the problem. From 1925 to 1929, the average stock prices rose and then doubled and this encouraged people to buy stocks, with hopes of selling them...