Above: A picture of people outside a bank to take out their money otherwise known as bank runs
What Happened?
But there were multiple waves of panic in the Great Depression for there were many ups and downs before the Great Depression ended completely. The first wave of panic happened in 1933 when investors lost confidence in their banks and wanted to take out all of their money. But the banks didn't have all of their money on hand so they ended up going out of business. This resulted in thousands of banks closing their doors. President Hoover then gave banks government loans so the banks could start up again and begin hiring people back. However, President Hoover believed that the government should not involve itself with the economy and didn't have the responsibility to create jobs. Because of his belief they voted for the opposite party- Franklin D. Roosevelt won the election. One of his most famous quotes are "The only thing we have to fear is fear itself". To help America prosper once again, he made a 4 day bank holiday where all the banks would close so the Congress could pass a reform legislation and open up the banks again. While this process was in motion, he would give talks over the radio to calm the nation in the time of panic. He was so good that only in his first 100 days, he managed to stimulate industrial production, agricultural production and create jobs. He also created the FDIC so people's accounts would be protected and he helped create the SEC to help regulate the stock market and to prevent abuses of the stock market that led to the crash. The TVA then started to build dams and hydroelectric projects to control the flooding and give electricity to the South. The WPA program also helped America by giving jobs to 8.5 million people from 1935-1943. The economy slowly started to improve in 1933 and the GDP of America was growing at 9% per year. However a sharp fall hit in 1937, because the Federal Reserve increased the amount of money in down payments the banks had to pay them. This resulted in more money going to them, then to citizens. The following year was also another decrease in spending. This resulted the Great Depression to last even longer. The Great Depression truly ended when WWII began and many people were need to fill jobs to make weapons for the war.