In the years of 1929 to 1939 the United States faced the longest and worst economic collapse, known as the Great Depression. During the Great Depression, about fifteen million people were unemployed and suffering. In addition to, almost half the country’s banks have failed during the depression. Also, the stock market crash wiped out millions of investors. This resulted of high suicide rate among investors in the market. The great depression was mainly caused by not having sufficient supply of workers to keep up with the rapid industrial expansion during the previous decade. This coupled with the wealthy Americans choosing to save their money instead of spending money back into the economy. This created a significant pause to the economy that
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In 1930 President Hoover signed the Hawley-Smoot Tariff Act to protect the American Industry from the overseas competition. As the result the European countries stopped buying American products. The high tariffs on imported goods reduced world trade contributed to downward spiraling of the American economy. “By 1932, 5,000 banks had failed; farmers' incomes, never that high even in the go-go 1920s, declined by 65 percent, while in the cities unemployment rates tripled” (Waldhorn). In the addition, the withdrawal of credit from US banks was felt among the European countries that were still in a period of recovery following the devastation of the First World War. Although other countries were not as dependent as Germany on United States loans, many governments and businesses across the globe suffered through an inability to obtain credit or a requirement to repay loans already received. Also, the effects of the downturn were made considerably worse by the misguided reaction of many governments. They seeked to protect their countries' industries and adopted protectionist policies. As a result, world trade collapsed. Instead of protecting their countries' businesses, protectionist policies only served to make the crisis
In 1930 President Hoover signed the Hawley-Smoot Tariff Act to protect the American Industry from the overseas competition. As the result the European countries stopped buying American products. The high tariffs on imported goods reduced world trade contributed to downward spiraling of the American economy. “By 1932, 5,000 banks had failed; farmers' incomes, never that high even in the go-go 1920s, declined by 65 percent, while in the cities unemployment rates tripled” (Waldhorn). In the addition, the withdrawal of credit from US banks was felt among the European countries that were still in a period of recovery following the devastation of the First World War. Although other countries were not as dependent as Germany on United States loans, many governments and businesses across the globe suffered through an inability to obtain credit or a requirement to repay loans already received. Also, the effects of the downturn were made considerably worse by the misguided reaction of many governments. They seeked to protect their countries' industries and adopted protectionist policies. As a result, world trade collapsed. Instead of protecting their countries' businesses, protectionist policies only served to make the crisis