What Caused the Great Depression?

The Great Depression was a global phenomenon that significantly changed the course ofhistory MBT Shoes
. In America, people lost their life savings when banks collapsed. The severedecline in US capital triggered economic troubles overseas. The resulting Germanpoverty ultimately contributed to the rise of Nazism and World War II! What sparked theworld-changing Great Depression?Historians cite lots of contributing factors. A lot of agree that the downturn began with theUS stock market crash of 1929. Throughout the 1920s, rapid economic growth andindustrialization had been accompanied by easy lending. There was a vast amount ofunsecured consumer debt. But in October of 1929, the prosperity and optimisticspeculation of the “roaring twenties” suddenly collapsed. A Black Thursday on WallStreet was followed by a Black Tuesday, and investors quickly lost $40 billion! Manyhad invested their life savings and mortgaged their homes.President Herbert Hoover failed to understand that his nation’s economy could collapse; hebelieved he was witnessing a mere recession and said the market would naturally recoverwithin a couple of months. He refused to establish a federal unemployment program, andhe dismissed public construction projects as “progressive ideas” that wouldn’t improvethe economy. Hoover was a sort of “trickle-down” theorist who was inclined to supportorganizations before unemployed individuals. He tried to protect American providers withthe Hawley-Smoot Tariff, but by reducing trade he only worsened the faltering Americanand global economies.When the American economy sputtered to a standstill, others suffered MBT M.Walk
throughassociation. America had been an effective trade partner for England, France, Germany,Japan, Argentina, and Brazil. These countries suddenly saw sharp declines in demand fortheir products. Also, all of the countries’ currencies were linked through their adherenceto the gold standard. Virtually each industrialized nation suffered wholesale pricedeclines of 30 percent or more at the start of the Depression.The 1930s were particularly harsh for farmers in the United States. In the Great Plains,the Depression was worsened from 1933 to 1939 by a severe drought and dust storms.Unable to produce crops, farmers lost their farms and banks seized their homes. Farmfamilies were reduced to living in shantytowns, which Hoover’s critics calledHoovervilles. These farmers and other destitute citizens turned to bartering for basicgoods in the absence of cash.Farmers’ losses increased bank failures in rural areas, and urban bank failures had alreadybeen escalating rapidly. When stock investors lost their capital, banks started to fail at tentimes the 1920s rate. Nine thousand banks failed during the 1930s. And when banksfailed, customers lost their savings! By the end of Hoover’s term in 1933, Americans had$140 billion missing from their accounts. The bank failures limited new enterprise andgrowth across the country. Banks started to limit how much money customers coulddeposit, and loans became scarce. Hoover was not about to win a second term.After Franklin D. Roosevelt was inaugurated in 1933, he instituted a bank holiday. Bankswould rest for several days while Congress passed the Emergency Banking Relief Act tostabilize the banking procedure. The new President told his nation, “The only thing we haveto fear is fear itself.”Roosevelt tried to end the Great MBT M.Walk Shoes
Depression by creating dozens of government organizationsto support the individuals.