The Great Depression
The large and almost worldwide depression is said to have started on "Black Thursday", Oct. 24, 1929, when the value of stocks on the U.S. stock market collapsed an incredible amount in a day. Has been described as the result of a free economy. Cyclical fluctuations, country-or world-wide variations in business, have been blamed on capitalism, particularly economic downturns.
The Great Depression was not only caused by government manipulation of the monetary system. The reason why it became so severe and prolonged was because it was the first time they used political methods to counter an economical depression. Through interventions to keep wages up, creating public works, laying the foundation for state agricultural policies, close the borders and keep inflation the U.S. government managed with presidents Hoover and then Roosevelt in the lead, prolong the Depression into nearly a decade.
During the Great of depression time was government interference in the economy stronger than ever, and a special government agency had been added specifically to prevent depressions and their similar problems, such as the banking panic. This authority was Federal Reserve Board and would be the last resort for banks to borrow in order to prevent bankruptcy, which had happened in previous depressions.
The middle class that emerged in the 20th century, and the working class were the worst affected. But also many wealthy lost the value of their money in the risky business as well as during the stock market crash. There were many who were unable or unwilling to trade more than the most necessary goods in the stores just because they couldn't afford more, or wanted to save and store their money instead.
There were many families who had payed with credit during the late 20th century, and couldn't repay, they had to return their goods to the seller. This meant that there were more goods than it was in demand and, wages weren't raised when the dollar dropped in...