Causes Of The Great Depression Essays Example

There were several causes of the great depression. First, the 1920’s economy had been booming for many years, and industrial manufacturing had increased significantly. Because of this economic boom, many people started buying on credit, even stock, which temporarily inflated the stock market. Because of all this credit, the stock market crash of 1929 had a huge, devastating impact on the economy. Stock was now worth less than people had paid for, and since they paid for it on credit, they had no way of repaying the banks for the loans. As a result, banks went bankrupt and people lost their savings, or completely withdrew them. Around 800 went bankrupt within the first 10 months during 1930. It was this bank failure that caused the most devastating blow to the economy and why the Great Depression was such a hard time for most Americans. However, there were other causes as well. The agricultural industry had been in recession prior to the stock market crash, as a major drought had been occurring for some time prior to the Great Depression. Therefore, it was all these factors combined together that caused the great severity of the depression between 1929 and 1939 (“Causes of the Great Depression”).
The response by the American government to the Great Depression did not have a positive impact at first. Hebert Hoover was someone who did not want a lot of governmental involvement in the economy, so his lack of leadership during this time was a major factor in the severity of the depression. He took a “hands-off” approach that did nothing to solve the problem. However, once FDR was elected, he instituted many policies that tried to put people back to work. His New Deal was instrumental in helping get out of the depression as he instituted many new agency and protections for people in poverty (“The Great Depression”).

References

The Great Depression. (n.d.). Retrieved February 5, 2015, from http://www.history.com/topics/great-depression
Economics Essays: Causes of Great Depression. (2012, September 28). Retrieved February 5, 2015, from http://econ.economicshelp.org/2008/10/causes-of-great-depression.html