University Of Central Punjab Assignment: Principles Of Management Presented to: Prof.

Umar Niaz By: Mahrukh Nasir Date: 19-10-2012

History and Causes of Great Depression

The great depression:
The great depression was a very great tragedy which took-out many Americans from their work all was due to govt. interference in the economy and society. Duration of great depression was from 1929 to early 1940s.

Overview of great depression:

Market crash of 1929 Drought Bankruptcy Bank closure Presidents inefficiency Unemployment Industries closure After enjoying the prosperity and optimism for a decade the US economy was thrown into despair. And that day was known as BLACK TUESDAY, OCTOBER 29, 1929. This was the beginning of depression officially and that was the day when stock market crashed in US. When the stock prices drop fall at high speed, there had occurred a stage of utmost anxiety. A lot of people were trying to sell their products but no one was buying their products. The stock market which was sure about being rich always, it went through the situation of bankruptcy. And the crash of stock market was just beginning. The banks which invested a large number of their clients money in stock market they used to close their banks at that. Seeing that some banks close caused another utmost anxiety in country. The people who have their savings in other banks, they rushed to those banks and withdrawn their amounts. Immense withdrawal caused some other banks to close. Those who didnt get their savings from banks before the banks closed, they also became bankrupts. Businesses and industries were also affected due to such situation. Having lost capital either in situation of market crash or banks closure many businesses started to cut the wages and working hours of their workers. Consumers started checking their spending and they refrain from purchasing luxury goods. This lack in customers spending tended to the businessmen to cut off more of workers wages and even some workers to lay off from work permanently. Whole situation lead the businessmen of many industries to close their businesses by letting the workers permanently unemployed.

The dust bowl:

In past when the depressions came, the farmers could at least feed themselves. But after great depression they even couldnt do that. During great depression the plains were hit hard and were to face with drought and horrible dust storms. The dust storms destroyed the crops of farmers by picking up the loose sand on the land. Invention of tractor caused manpower became useless. The small farmers who couldnt afford that, were already in debt. They suffered a lot because of borrowing for their seeds which they have to pay when their crops being reaped. The dust storms destroyed their crops and they failed to pay back their debt. They couldnt feed themselves and their families. Now there was the time when banks closed small farms and leaving the farmers homeless and unemployed.

Hitchhiking:
During great depression when the people became Unemployed locally, they tried to find out jobs on other localities nearby or far away. For this they started hitchhiking i.e they traveled on roads and rails to go distant places. When there was any job opportunity the number of applicants rose to 1000 for same job. The people who were unlucky to get that job were used to stay in SHANTYTOWN out side the town. Shantytown was a housing place where housing material was found freely like driftwood, cardboards, newspapers etc. The farmers who were jobless and homeless headed over to California, being heard a rumour about job opportunities regarding agriculture there. Unfortunately there was some seasonal work and the conditions for these families were transiet and hotile. Some farmers came from Oklahoma and Arkansas. They were called by derogatory names of Okies and Arkies.

Roosevelt and New deal

The US economy destroyed under the presidency of Herbert Hoover. As the president Hoover repeatedly said about optimism, so the people blamed him for this great depression. The Shantytowns were names as Hoovervilles after him, the newspapers were known as hoover blanket, the empty pockets were known as hoover flags and broken cars were pulled by horses and they were known as hoover wagons. During the presidency election of 1932 the Hoover could not stand to be re-elected by people so the Franklin D. Roosevelt became new president. As soon Roosevelt took the charge he closed all banks and let them to re-open. Now people were hopeful that this person would solve their problems. Soon the Roosevelt introduced a program by the name The New Deal. Some of New Deal programs were started to help farmers like AAA (Agricultural Adjustments Administration). There were some other programs like CCC (Civilian Conservation Corps) and WPA (Works Progress Administration) started to help the unemployed force by hiring them.

End of Great depression:

At-last great depression ended and US economy became bit stabled. The major turn around US economy was due to Bombing pearl Harbour ans entrance of US in World warII. Weapons,artillery,food etc was required. The US men went to army and women held over homes and industries as well. So it was the World War II which was the reason of ending the Great depression.