The Great Depression And Its Effects On The Economy Essays

1309 Words Feb 4th, 2015 6 Pages
From 1929 to 1941, a period of time began in the United States that was referred to as the Great Depression. A lack of confidence led to withdrawals in order to protect money, draining the banks ' reserves and destroying their ability to make loans. This mistrust affected the entire economy and started a dangerous cycle. Since that time, there has been much historical debate over what actually caused it, and many theories have been proposed to explain how a country’s economy could fail so suddenly and dramatically. However, the banks were the biggest problem and explain a majority of the issues. The Great Depression was a time of great economic struggle mainly caused by the mistrust of the banks ' failing policies, poor bank supervision, and the lack of a guarantee on the deposits of customers.
One theory proposed by economists and historians is that fear was the main cause of the Great Depression. President Herbert Hoover argued that the problem was not about the shaky bank strategies or unstable economic structure, but that it was about the lack of confidence in the economy. He believed that he had conquered the Depression by 1932, but that the new establishment of fear in society that he claimed was caused by the Democrats "dashed the cup from his lips". Upon President Franklin Delano Roosevelt’s inauguration, Hoover suggested that he should calm the nation 's fears and adopt his administration 's policies as opposed to the "New Deal". Roosevelt ignored his…

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