Prevention of the Great Depression Essay

Some might say that there would have been no way to prevent or decelerate the Great Depression. However, regulation of the stock market, insured banking systems, and limits on agricultural production could have been the catalyst the country needed to cause the depression to reduce into a recession or put a stop to it all together. The stock market during the depression had free range to drop as low as it potentially could. If there had been some sort of limitation system than it would have saved people a lot of money.

Before the crash people were just looking for an avenue to invest their money but what they didn’t realize was that their money wasn’t necessarily safe in the stock market. The stock market was actually a dangerous place to invest your money because it had the potential to crash and the people running the market had the freedom to do whatever they wanted with the money invested without the investors even knowing. Though the stock market today is still very unpredictable if there were limitations and regulations like there are today the amount lost would have been reduced by a great amount.

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When the stock market crashed the people lost trust in the whole system and banking was a part of that system that was incredibly flawed. Some people think that the great depression was caused by the banking crisis; others think that the bank failures were caused by the economic collapse. Either way the banks had no insurance until after the depression when they should have created an insurance plan ahead of time. People put their whole life savings into the bank and if a bank failed then they lost every cent that they had in the bank and banks were failing at alarming rates.

Like the stock market people had no idea what the workers were doing with their money. The whole banking system was just completely unorganized which lead to the failure of over 9,000 banks with a loss of billions of dollars. The agricultural depression began before America even realized that there was a problem. The amount of money people were making that lived on farms was less than half of that that people in urban areas were making. There was no limit as to how much the farmers were producing because of this they continued to over produce until the value of their product dropped drastically.

Poor soil caused by the drought combined with the low demand caused land value to drop. To make up for the low pricing the framers started to plant more. With all the extra products the value dropped which then caused the need to borrow money from the bank. After they owed money they needed a way to pay it back so they started to over produce again and everything would just repeat itself. The agricultural depression was one big vicious cycle and the farmers weren’t receiving any help from the government.

When all the government had to do was put a limit on how much you could produce, borrow, and invest. All the country needed was guidance from the government not charity or handouts. If the government had taken control of the situation before everything blew up into a Great Depression the country wouldn’t have lost so much money. Limitations on the agriculture and stock systems and insurance on banking ahead of time would have definitely changed the outcome of the Great Depression.


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