Great Depression and Its Causes Essay

1248 Words Sep 22nd, 2005 5 Pages
The causes of the Great Depression of the 1920's and 1930's has been argued about for generations. Most people agree on several key topics and that it was the severity and length of time the Depression lasted that was actually the most remarkable. Hoover made many noteworthy attempts to try and solve this crisis, yet in the end it was President Roosevelt and his "New Deal", that brought many Americans hope for the future. The first factor in the start of the Depression was the lack of diversity in the American Economy. It relied strongly on only a few basic industries, notably the construction and automobile industries. In the 1920's those 2 industries began a rapid decline: construction became scarce and fell from 11 billion to under 9 …show more content…
This caused American banks to begin making large loans to European governments which they used to pay off their earlier loans, really only piling up debts. The collapse of the international credit structure in 1931 was one of the reasons the Depression spread to Europe. Hoover made many noteworthy attempts to try and combat the Depression. His first response was to attempt to restore public confidence in the economy. He implored businessmen not to cut production or lay off workers. He talked labor leaders into forgoing demands of better wages and hours. But by mid 1931, the structure of voluntary cooperation he had constructed had collapsed. Hoover then proposed the Presidents Organization for Unemployment Relief, $432 million granted to states for public works and recreation. But the spending was not nearly enough in the face of such devastating problems. He proposed the Hawley Smoot Tariff in 1930, containing increased protection on 75 farm products. Also, in 1929 he proposed the Agricultural Marketing Act, which established the first major government program to help farmers maintain air prices. But neither of these attempts ultimately helped Americas farmers significantly. Americans were starting to see Hoover as "aloof" and "out of touch", not really with it. The Federal budget was running into the red and into a deficit. Hoover then went to Congress and

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