Causes Of The Great Depression

1397 Words 6 Pages
The Great Depression was not caused by one lone factor. Instead, the Great Depression was caused by a combination of domestic and worldwide conditions. One reason the Great Depression was started was the Stock Market Crash of 1929. Another reason was the bank failures that happened because of the Stock Market Crash of 1929. There are also other reasons the great depression occurred. The reduction in purchases, and the American economic policy with Europe.
As said above, The Stock Market Crash of 1929 was a major cause of the Great Depression. After World War 1, there was a sense of hope and optimism in the air. In that time, around the 1920s, many people invested in the stock market. The stock market was a chancy thing to depend completely
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The reduction in purchases where caused by many factors, the stock market crash was one of the factors. The stock market crash caused numerous business to lay off many from their jobs and the unemployment rates skyrocketed. The stock market caused wages to plummet and sent the economy into a downward dive. For professionals who had worked for 30 years losing a job was something they didn’t know. They had worried about not being able to feed their families or provide for them. They believed that after a little while everything would go back to normal, that it was just a bump in the road. After a while of wishful thinking their hopes turned sour. The confidence level of the consumers dropped a lot after the stock market crash. With all of the people who were laid off without no pay they had absolutely no money for anything they needed or wanted. As a result the people couldn’t buy anything from companies so no investments or spending led the business and factories to slow production down. This led to more people fired from their job and the people who were lucky enough to keep their jobs had their wages dropped tremendously. On top of losing their jobs, the people lost their homes and belongings. With all of the money they lost from the huge stock market crash they didn’t have a way to pay or keep their belongings. Most of the people …show more content…
As all of the businesses began to fall the American government created the Smoot-Hawley tariff. This tariff was made to protect American businesses and companies. The tariff was a consequence of the Great Depression. It was made to help solve the problems that had occurred from the Great Depression, but it just caused more problems than solve them. This tariff placed a high tax on imports from all of the foreign countries. It caused a drastic decline in international trade, the amount of money they lost was irrational. U.S. imports from Europe went from $1,334 to $390 million, while U.S. exports fell from Europe $2,341 to $784 million. In the end, world trade declined by about 66%. This was one unintended consequence of the new Smoot-Hawley tariff. Another unexpected consequence was some of the foreign countries retaliated economically against the U.S. because of

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