HIST 1025UNIT 5DEPRESSION, NEW DEAL, AND GLOBAL WARWRITING ASSIGNMENT(To be submitted for evaluation)1. (A) The road to rock bottom ostensibly began with the stock market crash on Black Thursday, October 24, 1929. Discuss the causes of the Great Depression and how the Hoover administration responded to the developing crisis. Then turn to Franklin Delano Roosevelt and the New Deal. Historians sometimes characterize FDR's program as one of relief, recovery, and reform. Discuss the problems that FDR encountered when he took office and the evolution of the New Deal down through the end of his first term.The Great Depression officially began on October 24, 1929 which we called “Black Thursday.” Stock prices risen throughout the 1920s but during the 1928 to 1929, stock prices increased rapidly; total stock market value was $27 billion in 1925 but increased to $87 billion by October 1929. There were many reasons of this: stockbrokers lending buyers up to 75% percent of a stock’s cost, credit or “margin”buying spread, the income-tax cuts had increased the flow of money into the market, and also upbeat statements also fostered the boom, mutual bunds lured novices into the market. However, the construction industry started to wobble in 1928-1929 which was the signal a decline in the housing market and business expansion. During the 1928 to 1929, despite that the Fed warned to restrain the lending to the banks but lending institutions continued to loan money freely. Finally, “Black Thursday” came on October 24, 1929. Since “Black Thursday”, some stocks had no values and became worthless in the markets because there were no buyers. After the Black Thursday, there was a weak economic upswing early in 1930 like President Hoover said, but the economy went into a full-scale depression. Although the U.S. economy developed before the Great Depression in the 1920s, there were structural problems which 1920s’prosperity highly unstable. Throughout the 1920s, agriculture remained depressed andwage increases lagged behind factory output which reduced consumer purchasing
power, and the new assembly lines led overproduction. Consequently, housing, automobile, textile, tire, and other major industries were over extended and furthermore, key industries lagged technologically and could not attract the investors which was necessary to stimulate recovery. Regarding to the global view, the U.S. depression was related to a global economic crisis. After the War, European economies had a trouble with war-debt payments and trade imbalance with the U.S. Because of this, America lost some of markets and gave negative effects to the U.S.