The 1920s was a time of roaring prosperity. Even mid-October of 1929, the average middle-class American saw an “illimitable vista of prosperity” (Dixon 1). The thought of poverty was close to an end; in 1928, President Herbert Hoover stated, “We have not yet reached the 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” (Dixon 1). The prescience of the end of poverty became known as the American Dream; however, this foresight was shortly lived. On Tuesday, March 26, 1929, the Hoover Administration saw the largest stock market crash of their administration to that date. Several months later brought Black Monday, the largest stock market crash in American history and the cardinal cause of the Great Depression. The Great Depression is one of the single most important events in the financial history of the United States and the world; the effects of and leading to the Great Depression lasted for several years.
The Great Depression was an economic deficit with worldwide effects that began with the stock market crash of October 1929; the most profound effect of the Great Depression was the highest rate of unemployment in American history: banks, factories, and stores closed, leaving millions of Americans jobless with no money. Without money, many Americans had to rely on either the government or donations from charities to be obtain food; as the depression continued, however, the Roosevelt administration created government agencies to aid in supplying Americans with food, relieving the effects of the Great Depression, preventing a catastrophic event like it from occurring again (Great Depression).
The group of people most affected by the Great Depression and the events it instigated were the American stockholders; thousands of stockholders lost large sums of money due to the rapid decrease of stock values caused by the crash of Black Monday. Although this was a huge loss, predicting it was impossible; from 1925 to 1929, the average stock price of a common stock on the New York Stock Exchange more than doubled, causing many people to make large investments in the stock market in hope of making large profits. Even people who had no prior knowledge of the stock market or how it worked attempted to invest in anticipation of profits. Economists, such as Irving Fisher, assured stockholders that they were “dwelling on a permanently high plateau of prosperity (Dixon 1)”. This, along with the assurance of many other reporters and professionals, cause the popularity of being a stockholder to skyrocket: in 1920, there were only 29,609 stockholders; a mere ten years later, there were 70,950. Stockholders’ ignorance of how the stock market worked soon turned against the thousands of investors in America and spread throughout the rest of the United States, halting economic flow (Dixon 2).
The Depression had a remarkable effect on the United States; however, the United States was not the only place to feel the consequences of the Great Depression: Canada was also profoundly affected (The Global Effects of the Great Depression 1). Previously, Canada’s economy relied on the export of grain and other raw materials. The people who exported these goods suffered huge losses after other countries increased tariffs on imported products. Following the closing of many Canadian companies, the unemployment rate in Canada rose from three percent in 1929 to twenty-three percent in 1933 (Great Depression).
Other governments were affected by the Depression as well. As the Depression was at its zenith in 1933, the only country hit as hard as the United States was Germany (Garraty 182). Approximately six million individuals in Germany were left unemployed. Many aspects of German life led to these despondent times. Most prominent were the reparations Germany was still...