The Great Depression and Great Engineer ( Hoover )

The Great Depression and Great Engineer

The Great Depression and Great Engineer

(1929-1939)

''If some unprecedented calamity should come upon this nation, I would be sacrificed to the unreasoning disappointment of people who had expected too much.''(Herbert Hoover)

The Great Depression started in America in 1929 and lasted till 1939- the time of the beginning of World War Two. It evoked a lot of debates, speculations and misunderstanding among politicians and economists of all levels. It is common to believe that Herbert Hoover was a careless president who allowed already crumbling economy of 1929 to go down into deep pit hole pulling along the entire nation. Majority of middle class population, who are not wise-versed in economics or politics, judge Hoover upon the outcome and they do not seem to be unfair. Paul Johnson, in his book '' A history of the American people '', reasonably said that ''there is no logic or justice in history-only chronology.''

Herbert Hoover came to his presidency in 1929 in a very difficult time in American history. The Wall Street crash was significant evoking a four-week panic. Indexes were down to 224 from 452, GM (General Motors) went down from GM 73 to 8; in deed a very deep plunge in a stock market. However, ''the stock values were right in relations to earnings''. Considering the preceding events that took place in American economy from 1920, with its self-adjusted recessions and artificial inflations, the downturn was inevitable and needed. Federal Reserve Bank System was created to maintain prosperity nationally and internationally by deliberately inflating monetary supply. ''Credit was expanded from 45.3 billion on June 30, 1921 to $73 billion in July 1929, a 61.8 percent expansion in eight years,'' (Johnson, Paul). This process was managed by two powerful figures in the formation of the US financial policy domestically and internationally: Montage Norman- governor of the bank of England and Benjamin Strong, governor of the New York Federal Reserve Bank. The prices steadily were going up creating a demand-supply problem and resulting in recessions that successfully self-adjusted.