Great Depression 1930

Great Depression 1930 The Great Depression began in 1929 with the crash of the Wall Street Stock Market. By early 1930 the price of stock had risen slightly and then fell again. Businesses cut their production and jobs.

Bank loans were being defaulted on and depositor confidence was eroded for there was no depositor insurance backed by the Federal government. In 1930 bank failures reach a staggering 1,352 and towards the end of that year run on banks were common in the southern states.

The Federal Government made a few mistakes during these years. People were hording money and not spending. This reduced the money supply in the economy. However, there were plenty of Federal gold reserves and the money supply could have been increased from these vast reserves. Not only that but the government did not reduce taxes and so release more money into the economy for buying consumer goods. The government thought that by increasing the supply of money, the economy may be weakened even more. President Hoover strongly felt that rising government debt would slow down business recovery.

Family life was changed dramatically during the 1930s. For the first time in US history the birth rate dropped below the population replacement level. Young people could not afford to get married and because of the financial strain, many families simply fell apart. Men walked out on their families because of shame and during these bleak times, 1.5 million husbands had left their wives. Women, and even children, went out to work to avoid going to relatives for help. In many cases it was easier for women to get work rather than their husbands, working as domestic servants for example. ramadan