1. Darcie-Lynne Chidester
Professor Cantera
HIST 1700
3 May 2012
Final Exam Essay Question Number 5
In 1929 companies in the U.S. hit the “Bubble Point”- Market price has soared far higher
than the "true" (based on fundamentals) value of the security or contract or house or product or
whatever it is- in which workers could no longer continue to fuel further expansion, leading the
stock market to slow down and eventually crash. What causes the stock market to crash? When
investors believe a stock is a good value they are willing to pay more for a share and its value
rises. When traders believe the value of a security will fall, they cannot sell it at as high of a
price. If all investors try to sell their shares at once and no one is willing to buy, the value of the
market shrinks. On October 24, 1929, "BLACK THURSDAY," this massive sell-a-thon began.
By the late afternoon, wealthy financiers like J.P. Morgan pooled their resources and began to
buy stocks in the hopes of reversing the trend. But the bottom fell out of the market on Tuesday,
October 29. A record 16 million shares were exchanged for smaller and smaller values as the day
progressed. For some stocks, no buyers could be found at any price. By the end of the day, panic
had erupted, and the next few weeks continued the downward spiral. In a matter of ten short
weeks the value of the entire market was cut in half (US History: The Stock Market Crash). The
Stock Market Crash plunged the U.S. unto its longest, deepest economic crisis in history. The
fundamental structural weakness in American Economic System led us into the Great
Depression.

2. After the Stock Market Crash many bank failures swept across the nation, which had a
major effect on the economy. Banks operated without guarantee to their customers, creating
panic when times got tough. Unemployment increased dramatically and 25% of all Americans
could not find a job. Unemployment was one of the worst things that happened during the Great
Depression. When the Depression spread across the Atlantic, Europeans bought fewer American
products, worsening the Depression. Also, Oklahoma was hit hard during the depression due to
the weather. Drought brought heavy dry wind, forcing people to pick up and move westward.
The Great Depression is also known as the “Psychological Depression” because many people
turned to suicide. Women turned to Prostitution so they could pay for bills. Alcoholism increased
as well since many people turned to alcohol to escape from reality. Universities throughout the
nation saw their bodies shrink, though High School Attendance increased among males because
they decided to stay in school longer because the prospect of young man getting a job were so
slim. Despite the hard times, pop culture saw new trends. Classic Films deputed and even though
many could not afford to spend an evening out, many families saw at least one move per week.
Games were also gaining popularity as was the Blues/Jazz.
Many were frustrated with President Hoover’s because he was unable to provide proper
relief in hard times. He is known as the “guy who won’t help”. Franklin D Roosevelt’s ability to
communicate helps him get elected in 1933. He is most famous for his message “Nothing to Fear
but Fear Itself”. What he means by this is that the worst had already happened so there wasn’t
anything else to fear but fear itself because fear was the only thing left to fear and why fear that
when nothing worse could happen. After he was inaugurated, FDR was quick to act. His first
priority after being inaugurated was remedying the failing financial institutions. A few days after
taking oath of office, he declared a “Bank Holiday” closing all banks from March 6 to March 10.

3. During this period, Roosevelt presented the new Congress with the Emergency Banking Act. The
law empowered the President through the Treasury Department to reopen banks that were
solvent and assist those that were not (US History: A Bank Holiday). After this the bank crisis
was over and many Americans were relieved and more confident in the banking system.
After dealing with the bank crisis and resolving it, FDR started the New Deal also known
as the “Alphabet Soup”. The New Deal was a program established to provide relief for the
unemployed, also intended to boost both industries and working Americans (US History:
President Roosevelt). The first “Alphabet Soup” was the Federal Emergency Relief Act: gave $3
billion to state and local governments for direct relief payments. Roosevelt was hesitant to
continue this type of aid so after two years, efforts were shifted to "work-relief" programs. These
agencies would pay individuals to perform jobs, rather than provide handouts. There were many
Alphabet Soup agencies. FDIC allowed financial stability and public confidence in the nation’s
financial system. CCC allowed jobs to young people that helped them contribute to their families
household and WPA allowed unskilled workers to carry out public work projects (construction,
literacy, etc.). The New Deal was the most ambitious legislative program ever attempted.
While FDR had many supporters he also had many enemies. Conservative Democratic and
Republicans charged FDR with abuse of power and failed to support his plan. During the 1938
Congressional elections, Roosevelt campaigned vigorously against anti-New deal Democrats. In
nearly every case, the conservatives won. The coalition of Southern Democrats and Republicans
dominated the Congress until the 1960s and effectively ended the reform spirit of the New Deal
(US History: Roosevelt’s Critics).