Question

1. In what way is the railroad an important literal and symbolic figure in the Great Depression?

2. Using the term “bank run” explain how confidence (or lack of confidence) contributed to the Great Depression. What was the “bank holiday” and how did it help Franklin Delano Roosevelt’s attempts to help the economy out of the Great Depression?

Answer 1

1.The railroads industry developed new ways for lowering the costs and attracting passengers in an economic crisis and in competition with the automobiles. At the same time the steam engines were replaced by the diesel locomotives as the nation was preparing for the war. Teh stocks and bonds of the railroads were the frequent leaders in market advances that occurred in August, 1932. The railroads were all new experiences for the Great Depression, especially for the youth.

2. At the time of the nation's economic woes during the Great Depression the wave of banking panics also known as bank runs in which many numbers of people withdrew the deposits from the banks in cash, which forced the banks to liquidate loans and lead to the bank failure too. The lack of confidence of the banks and struggle for taking the deposits in and the loans out lead to such a situation.

Franklin Delano Roosevelt proclaimed that after a month-long run on American banks, a bank holiday which began on March 6, 1933 and shut down the banking system of the nation. Roosevelt used the provision of emergency currency of the Act for encouraging the Federal Reserve for creating the de facto 100 percent deposit insurances in the reopened banks