Great Depression Essay Example | Topics and Well Written Essays - 1250 words

Great Depression - Essay ExampleThe citizens, on the early(a) hand, cut down their expenditure. It then spread to the other parts of the world because of the relationships the US had with other countries. Both the poor and the rich countries felt the effects of the great first gear. Cities were affected and mostly the ones which depended on intemperately industry. Construction and farming were hit hard. The level of joblessness rose. Citizens blamed the president in power for the economic opinion they were facing and were not willing to re-elect him back to power. This led to the election of President Roosevelt, a democrat, who applied about changes in the economy of America and adopted juvenile policies. In the mid 1930s, more or less economies began to recover with whatever recovering after the end of the World War 2. This essay will look into the causes of the Great depression and the reasons it lasted so long. Causes of the Great Depression The economic depression happene d because of a number of causes. The crash of the neckcloth commercialise is said to be the spark that ignited the fire of the economic depression. A number of scholars agree that it is the ahead(p) cause of the great depression. At the end of the market day on 24 October, the market had declined by 21 part from the high. The market fell by several points in the first three accommodate of the year. A selling panic occurred. By the year 1932, when the crash was completed, stocks had lost almost 90 percent of their value. The great depression could not be avoided despite the fact that the stock market recovered some of its losses (Walton 424). Another cause of the depression was the reduction in purchasing. After the fall in the stock market, people of both the upper and lower classes stopped purchasing items. This was due to the fear of probable approaching economic problems. No one was ready to risk his property. Resultantly, the production of items decreased leading to need o f a smaller work force. Employees had to sack a number of their employees to reduce the workforce resulting in a boot out in the number of the unemployed to a percentage of around twenty-five. The people who lost their jobs could not cover paying for the items they had bought hence led to repossession of their items (Walton 425). Another great cause of the depression was bank failures. Over gild thousand banks failed throughout the 1930s. This failure led a massive number of people losing their savings and comment them broke. The few surviving banks were concerned with how they will be able to continue. They hence had to come up with new strategies on how they will continue without failing. One of the strategies was they are not extending loans. This lead to a worse federal agency than it was after savings got lost because of bank failures. People spent less since they had lost savings in the failed banks and the surviving banks were not ready to give them loans. Hence, the dem and went down (Walton 429). Things got more difficult and businesses started failing. The American giving medication thought that creating an American economic form _or_ system of government with Europe will save the situation but it did not. This policy was called the Smoot-Hawley Tariff and was created in the 1930. Its aim was to help protect the American companies. The policy increased the import revenue enhancement charge. This increase in the import tax led to less trade between America and exotic countries. Countries found it expensive to trade with America after the increase in the i