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Major Causes of the Great Depression Assignment
Major Causes of the Great Depression Essay
The Great Depression started with the crash of the stock market in 1929. As a result, fourteen billion dollars of investment and 12 percent of the stock market value were lost. Forty billion dollars more was lost in two months causing great devastation to the economy of America. The stock market crash caused the failure of approximately seven hundred banks the same year. Above three thousand banks collapsed in 1930 leading to huge losses of money. As a result, people withdrew their money from the banks, which exacerbated the situation of the economy. Nine thousand banks closed in ten years, and the ones that remained were reluctant to lend money (Temin, 2016). America faced environmental destruction due to poor farming practices that did not preserve soil techniques. The country experienced massive dust storms that caused a lot of damage including diseases as well as killing both animals and plants. Drought conditions made people flee the nation, and the economy collapsed.
The investments were not worthy, and people’s savings declined, which lend to less spending and purchases across the board. Companies laid off their workers causing repossessions and evictions since they could not afford to pay for items bought on installment. The economic situation could not be alleviated because the employment rate rose to more than 25 percent, which meant less spending (Shi, and Tindall, 2016). On the other hand, America had a policy with Europe in which the Smoot-Hawley Tariff imposed taxes on imported goods. As a result, the trading partners retaliated by imposing tariffs on American goods leading to trade fell of two-third between 1929 and 1934. The president had to pass new legislation that allowed low tariff rates with other countries..................GET A PLAGIARISM FREE COPY