Causes and Effects of The Great Depression in America

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Few Americans in the first months of 1929 saw any reason to question the strength

and stability of the nation's economy. Most agreed with their new president that the

booming prosperity of the years just past would not only continue but increase, and that

dramatic social progress would follow in its wake. 'We in America today,' Herbert

Hoover had proclaimed in August 1928, 'are nearer to the final triumph over poverty than

ever before in the history of any land. The poorhouse is vanishing from among us.'1

In mid-October, 1929, the average middle-class American saw ahead of him an

illimitable vista of prosperity. I newly inaugurated president, Herbert Hoover, had

announced soberly in the previous year that the conquest of poverty longer a mirage: 'We

have not yet reached our goal, but given a chance to go forward with the policies of the

last eight years, and we shall soon with the help of God be within sight of the day when

poverty will be banished from the nation.'

This was the economic promise interwoven

with what a popular historian would call the American Dream. More complacently,

Irving Fisher and other economists in the confidence of Wall Street assured the citizen

that he was dwelling upon 'a permanently high plateau' of prosperity.2

Only fifteen months later, those words would return to haunt him, as the nation

plunged into the severest and most prolonged economic depression in its history. It began

with a stock market crash in October 1929; it slowly but steadily deepened over the next

three years until the nation's economy (and, many believed, its social and political

systems) approached a total collapse. It continued in one form or another for a full


decade, not only in the United States but throughout much of the rest of the...