On the quiet morning of Tuesday, October 29, 1929, a nationwide crisis was about to be born. The prototyped tapping of the telegraph machines and the customary hum and murmur of stock traders made the day seem nothing out of the ordinary. Then it struck like a thunderbolt out of the sky. The stock market crash that is infamous for signifying the birth of the Great Depression was underway. With prices plummeting down to what appeared to be no end, hordes of traders lined up to sell their trades as quick as possible. Putting in their best efforts, they attempted to minimize their losses in the stock market crash better known as Black Tuesday.

Any stock market crash has to have beginning rooted somewhere. The most logical explanation for all stock market crashes begins with money hoards. With the rich amassing money, the amount of cash going around the economy steadily (but definitely) decreases. If a bank had saved this these riches, others could receive this currency as borrowed funds and the economy would still be able to rotate this money around society. However, the problem arises when people keep their cash without the use of a local depository. If money hoards had an instant and immediate impact on the economy in a relative way, all the prices would drop proportionally to the money hoarded. However, things do not happen that way.

With less currency available to use, larger companies cannot afford the amount of raw materials they could formerly pay for. Consequently, production decreases and prices increase to substitute the losses made from lack of sales. Moreover, due to the reduction of production, fewer employees are required to work at this corporation, which introduces layoffs. As a result, the unemployment rate rises.

These newly unemployed people now have no source of income, which greatly reduces their motivation to spend money. With no profit, these former employees have no choice but to preserve their money and expect the worst for their future. These families do not waste their money on anything except their bare necessities: food and water. This causes a cycling effect on the companies; other businesses cannot sell their products, which leads to laying-off more workers. At a magnified aspect, workers continue to lose their jobs; businesses continue to lower their prices to attempt more sales; and eventually, the economy crashes.

Why specifically did the economy crash drastically on October 29, 1929? The previously mentioned reasoning, although a cause of Black Tuesday, takes a lot longer than one afternoon to take effect. The stock market experts of the late 20s analyzed the statistics of this stock market crash, and could not find an immediately visible cause. The best breakdown of why the crash happened was because of the natural way things go. Specialists believed that liquidation must take place before new growth can occur. This was the theory mostly believed in the age.

The president of the United States, Herbert Hoover, had developed similar ideas of natural flow while he was the United States Secretary of Commerce in the early 1920s. He applied these ideas when he became president later in the 1920s, and did not take action while his country was falling apart economically. His hypothesis was that raising wages would give enough spending power to the citizens of the United States to overcome the depression. He campaigned for high wages, and his efforts ended there.

Further expanding from these spending and selling views of the crash, there are other aspects of the crash less well known during the 1920s. They became better known after further research and analysis on the stock market crash. In the year 1936, John Maynard Keynes went against the general believed reason for the crash established during the aftermath of Black Tuesday. He worked against the concept that if consumption rates fell, interest rates will fall as well, which would eventually lead to increased investment. Although this was theoretically accurate, in realistic views, the expectations of businesses in future profits are what truly determine how the economy rises and falls.

In the views of monetarists, the reason of the crash was that Americans were losing recognition for the value of current currency. During the depression, reemphasis was put on the importance of money, and the Federal Reserve’s poor quality policies were stressed. Had the Federal Reserve improved their guidelines, the monetarists highlight the possibility of potential prevention of the Great Depression and Black Tuesday. In essence, the doctrines believe the lack of money supply caused the Great Depression. This closely correlates to the 1920s explanation.

The Wall Street Crash of 1929 did not only affect the United States. Due to the gold standard, Black Tuesday affected the entire world. This international crisis brings the desire to other countries to alleviate their economic policies. However, this would endanger a country’s ability to keep up with gold exchange contracts. For the countries that withdraw from the gold standard contract, the good component is quicker recovery times from these disasters.

Other countries took effect in various different ways. In specific, Australia could not trade with the United States due to the massive decline of imports and exports taking origin in America. Canadian production declined to 58% within three years of Black Tuesday. Although the country of France was a self-thriving country, they also felt the wrath of hardships and unemployment. Similarly, Germany experienced unemployment and riots along with the initiation of Adolf Hitler’s Nazi Party. Elsewhere around the world, citizens experienced adversities.

When Franklin Roosevelt became president during the time of the Great Depression, he was determined to make a change to the country that elected him as leader. He knew they relied on him to make a difference. Roosevelt was very unsatisfied at the president that acted prior to him, Herbert Hoover. Hoover did not take noticeable actions to recover the nation from the crash; instead, he did the exact opposite, ignoring what the people had requested. To show dissatisfaction, the poor and homeless named their homes Hoover Shackles and claimed that hard times are still “Hoovering” over them. Due to the lack of action from Hoover, the country became a literal disaster.

When Roosevelt’s presidency started, he introduced the New Deal program in 1933. It took in effect until 1938, and proposed and promised ways to relieve and restore the American ways. With this new series of renovations, America would be reformed and have the capability to continue with their Progressive ways from before the Great Depression.

The Great Depression shortly followed the Roaring Twenties, when the economy soared high to success and people were making fortunes within days instead of years. The Twenties were a time of renovation and an era of invention. Machines were first introduced into the world as substitutes for humans. A mechanism could do the same amount of work a human being could do within a fraction of the time. Humans got tired after a set amount of work, but engines did not even hesitate; they were unstoppable. With all the transformation, the twenties was a decade of Progressivism. New discoveries were being made every day, and the nation was being developed continuously.

Through this great expansion of the country, people started to forget about the American Dream. Although its definition of freedom and justice was maintained, the citizens’ defined meaning was being lost behind in the quest to make things better. The hard work and dedication in living life was lost when people could make fortunes just by trading stocks on the market. Although Progressivism innovated America, it also left behind the moral values of life.

During Roosevelt’s New Deal, the Progressivism lost in the Great Depression was revived; at the same time, the quest to achieve the American Dream was revived as well. The first large change Roosevelt launched was the Emergency Banking Act. This brought a complete renovation of the nation’s bank systems after a short bank holiday of non-operation. The entire nation’s bank system took a new approach to their businesses in saving and lending money out to the public.

The Glass-Steagall Act helped businesses owners by separating business and personal investments. If one were to go wrong, the other asset would still be available to support them. This assisted in defense if the Great Depression were to repeat in the future. Similarly, the Home Owners Loan Corporation was established to refinance mortgages for businesses and personal use.

In addition to corporations and organizations that helped the public with a service, there were many acts and associations that gave goods and tangible products to the poor and suffering. For example, the Federal Emergency Relief Administration, run by the government, gave over $500 million to the poor to help them resume their lives. The National Industrial Recovery Act managed to get $3.3 billion for public works to aid them in reconstructing the country and building new objects across the nation.

In correlation with the Industrial Recovery Act, there was the Civil Works Administration that used the provided money to reconstruct the land. With the assistance of the Civilian Conservation Corps, together they employed over two million men. This provided jobs for a large percentage of the unemployed citizens of America. This was an efficient way to reconstruct the United States; at the same time, it helped to reemploy the millions that lost their jobs during the depression. There were others, like the Tennessee Valley Authority, who also organized construction programs in their area.

For industry owners, the National Recovery Administration helped restrain industry competition. There were merges made of smaller companies into other smaller companies to make an overall larger company. With reduced competition, the industries could raise their prices to reverse the drops that were made during the depression to increase their sales. In the agricultural sense, the same was done as industry. The Agricultural Adjustment Administration boosted farm prices. For agriculture, farmers were encouraged to reduce the amount they produced so supply would gradually go down as demand stayed the same or increased. Prices would naturally rise, and that would reverse price drops made previously to increase sales. These plans were well organized as it uses the natural buying and selling processes to reverse a national disaster.

Finally, the most important portion of the First New Deal was the Securities and Exchange Act. This would be the most vital step in preventing another Great Depression in the future. The Securities and Exchange Act specifically prevented insider trading that was one of the hypothesized causes of the Crash of 1929. With inside information, traders have an unfair advantage against other traders. With these facts at hand, they can easily predict any changes or future alterations in the stock market pricing and act quickly before they ever happen. Making this unlawful would greatly reduce the chance of anything similar to this ever happening again in the future.

With all these Progressive programs in action, the nation quickly rose back up to moderate success. Roosevelt had accomplished the first step in allowing the country to thrive into the future. However, not everything went as well has he hoped. The First New Deal, with the National Recovery Administration targeted in specific, was ruled unconstitutional. Congress believed forcing (or aiding) industries to raise prices and succeed in business was not Progressivism. They believed it wasn’t even an entirely new and never-before tried strategy. Congress stated that this was an unjust way of supporting already big and thriving companies to do better and, in essence, dominate the entire line of industry by themselves. Roosevelt’s argument was that the problem with the Great Depression surfaced when under-consumption developed.

Being unable to out rule Congress, and still maintaining the Progressive thoughts in his head, Roosevelt launched the Second New Deal in 1935. Although somewhat similar to the First New Deal, Roosevelt made some crucial changes in planning that would even better support his country and lead them to triumph. Fundamentally, the Second New Deal defined the government’s role in the average American life.

After time went on after the Great Depression, some people recuperated more rapidly than others did. Parallel to the early 1920s, an unbalance of wealth started to emerge once again. Afraid of being ruled unconstitutional again, Roosevelt could not make any radical changes on this matter. However, he did develop the Wealth Tax Act, which taxed more heavily on the rich. Although this did not distribute any wealth among society, it gave more to the government to use to improve the country as a whole.

Similar to the First New Deal, there were organizations that gave work to the unemployed. To help people earn money and get a living, the Works Progress Administration gave public service jobs to the unemployed. While in effect, the Works Progress Administration employed over a third of the jobless in the country. This effort helped itself, with people working towards a common goal and objective.

Also comparable to the First New Deal, the second included more donations and funds provided to the public to help them recover. The Emergency Relief Appropriation gave over five billion dollars to the community for personal survival use. The appropriation tied in with the government, which received this money from extra taxes taken from the wealthy through the Wealth Tax Act.

In addition to just donated goods, the Second New Deal provided convenient services to many people across the country. For example, the Rural Electrification Act provided electricity to the rural areas that did not formerly have electricity. This provided leisure to people who did not live in or close to the city. Furthermore, the Public Utilities Holding Company Act greatly reduced the price of electricity. With electrical costs down, electricity became an available and affordable convenience. This helped in the Progressivism by allowing Americans to experience comfort and make them feel like they are at home when they are home.

However, two acts changed the lives of Americans forever. Firstly, the National Labor Regulations Act allowed workers to organize the National Labor Relations Board. This way, the citizens that are actually working would be able to have a large amount of control over what they do and how they do it. This also tells the government what role they play in the American life. It helps to restrict how much the government can do, but it also forces the government to do enough to help their citizens. Furthermore, the Social Security Act from the government guaranteed income after retirement. This provided a safe guarantee for the older fraction of the public.

The overall impact of the New Deal was that it built a powerful Democratic coalition. After Roosevelt, Democracy became the majority and the preferred party of government. This proved that America was Progressive and was able to improve their ways when they need to change. The country was powerful enough to overcome Communism in the United States during the Great Depression. Communism was wiped out entirely before 1935. The positive Progressivism was almost unstoppable.

However, when Roosevelt started to reduce relief programs in 1937, the stock market crashed again and jobless rates rose. The final addition Roosevelt made in 1938 was the Fair Labor Standards Act, which added a minimum wage. Through all this effort, Roosevelt’s presidency was a great success.

Overall, the New Deal broadened American Democracy and benefited workers, consumers, and minorities. This helped prepared the United States for the upcoming World War II.