What Caused The Great Depression

The roaring 20’s was time of dramatic social and economic change. There was increase in total wealth and urbanization of the rural areas of the country. However, the success of the American economy did not last more than a decade. After the WWI many countries were in heavy debt especially Germany who could not afford to pay for the war. Because of this the United States enacted the Dawes Plan in which U.S investors would give loans to Germany who will then pay off France and Britain, then they could pay the United States. This plan was heavily flawed and was one of the major causes of the Great Depression. Bank failures, the stock market crash, and an unhealthy economy to begin with were major causes of the Depression. Since workers lost jobs, they could not spend and stimulate the economy in turn that led to downsizing of major companies further hurting the economy. President Hoover made the matters worse by enacting the Smoot – Hawley Tariff which led to the increase of tariffs to 60%, causing the start of economic warfare between U.S. and foreign countries. Since President Hoover was a strong supporter of rugged individualism so therefore chose to no to intervene in problem of the society, so Franklin Roosevelt was elected by the people to solve the problems of the Great Depression. FDR created the New Deal with many policies for the betterment of the nation’s …show more content…
Although The New Deal did not bring the country out of the Great Depression it solved many of the pressing problems of the American society during the 1930’s through reforming the economy and banks, creating jobs, and providing relief for the