The historical incident of the Great Depression was most slow down in the history of the U.S.A. The problems that led to the great depression were the misdistribution of wealth and it was called as bull market. Bull market was based on the speculations and the success of the speculation lies if the stock market was in the rise though. Industries were not running in proper way. United States economy was depending on the new industries in 1920. The agriculture industry was also making very poor progress that time.
Equilibrium between supply and demand was not stabilized. The production of goods was in excess but prices were not dropping down. Therefore it was difficult to buy these goods. Middle class wanted to spend money on the luxury living. The real driving force behind the USA economy was the automotive industry. The other people connected with the automotive industry were making progress in their business. The banking system of the 1920s was not stable and sound. The fact that nominal interest rates were approaching zero meant that Federal Reserve policy was loose and ineffective.
The economic crises of the 20th century have adverse effects on the economy of the USA. It has badly affected the people of America, because there was no system for the unemployed workers. From 1929 to 1933 money income fell by 53% and as a result the fall in the demand was considerable. Due to this the unemployment rate increased to 25% by 1933. The great depression not only plunged the unemployed workers into poverty but also those who had heir jobs were suffering from the uncertainty about their job security in future. So great depression had forced the people to take loans and credit availability was also tightened. Repossessions of the cars, houses and household goods became the common. Automobile sales also fell considerably. However it was found that sale of a single car would keep employed the worker for another 3 months. These facts and finding were based on the ideas of the adverts built of the General Motors.
Franklin D.Roosevelt was most significant president of the USA in 20th century. He won the presidency of the USA four times and was the first president who kept the office more than two times. This part of the paper focuses on the great historical incident that took place from March 4, 1933 to April 12, 1945. During the era of the Franklin D.Roosevelt Committee for Industrial Organization CIO sponsored mass organizing drives in the automotive rubber, iron and steel and electrical industries that came to culmination in a series of dramatic breakthrough in 1937. The strike of the general motors forced to recognize the CIO’s as the United Automobile workers union.
In 1932 Roosevelt in his speech promised a new deal for Americans. This term was taken from a 1932 book by the same name A New Deal written by Stuart Chase. He argued in his book that earlier transition out of the feudalism into capitalism was now over. He wrote that the era of trusts, capital concentration and monopolies by large banks must give way to central or collective planning. Chase called it a third road that runs neither to red dictatorship nor to black business.
The Great Depression was the result of the combination of different awful factors. However many supporters of the government’s plan said that recovery of the economy from the depression/recession cycles may not have occurred as rapidly.