During the late “Roaring Twenties”, a false sense of security invaded American’s hearts and pockets. Positive tendencies camouflaged the reality, and encouraged people to spend more than they could in things that they didn’t really need. The cultural upheaval that started throughout the early twenties had completelychanged most people’s way of life. Mass entertainment, expanded urbanization, and growing attraction to literature and arts, made people designate a large part of their budget on these cultural activities. In addition, the multiple credit opportunities pushed people into getting money loans to buy houses (some families had more than one), cars, and other kinds of property.
Before the big crash,the stock market appeared to be in a very good moment. Its investors were thrilled by what seemed to be a very promising time for their stocks, which increased at various rates, but its general tendency was to rise. People took for granted that this magnificent performance would be eternal, so they started speculating and buying shares without a measure or a previous study of its behavior. This iswhat most people thought at that time: “If a man saves $15 a week and invests in good common stocks… at the end of 20 years, he will have at least $80,000 and… $400 a month. He will be rich. And because income can do that, I am firm in my belief that anyone can be rich, but ought to be rich.”
All the prosperity of the era was product of a great effort. The expansion of American economy was causedby the great development industry had at the time, because the agrarian sector did not benefit from the strong economy. Most of the production was related to the automobile industry, which included rubber, oil, and steel, plus the factories that produced cars. Employment raised as companies started hiring more employees to keep up with the production needs. From 1923 to 1929 the unemployment ratewas considerably low, it stayed around 3 percent. Also, these workers had insurance and other various benefits that maintained the work place prosper and peaceful.
However, all this wealth would not last long. The Wall Street Crash was the main cause and the trigger of The Depression. On “Black Tuesday”, October 29, 1929, the market lost $14 billion. The total loss for that week was $30billion!
In addition to the weak banking system of the time and the government-held laissez-faire, overproduction started letting feel its effects in the crashed and almost “dead” economy.
Many people were in total bankrupt. Not only they lost their jobs or their property was foreclosed, but they had lost faith in themselves. The first days people were in a denial phase; they could not accept orassimilate they had lost everything. A feeling of worry seized people’s minds; last night they went to their own houses, ate food they had bought, and slept confident on the security banks offered to their money, however, the next day they woke up having nothing, not even a place to go.
When there was nothing left to do but accept the situation, people were disconcerted. The most difficult part forthese auto-sufficient workers, who had always gained their money out of their hard labor, was to ask for support and accepting free food and help from the government. Many of them preferred to starve and make their families waste away rather than accepting the humiliation of using food checks or going to a bread line. Men, the heads of the family felt ashamed of not putting food on the table. A...