Essay on The Great Depression

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The Great Depression was a period from October 29, 1929 to around 1940, close to when the U.S. entered World War II. This period was an economic depression that was started by the Stock Market crash. Such a catastrophic time span has many different causes that can all relate and combine. The Great Depression had many underlying causes that started originated after World War I. A series of events, including the economic boom of the 1920’s were contributors to the Great Depression. World War I came to an end in November of 1918, when the Treaty of Versailles was signed. This treaty ended the fighting and of many other results, it put the blame on Germany for the war. This resulted in Germany having to pay major reparation fee’s and put …show more content…
While this was a good thing at the time, it would lead to negative results later. When the Dawes Plan of 1924 was signed into effect, America loaned out masses of capital to European countries; “$900 million in 1924, and $1.25 billion in 1927 and 1928” (Gusmorino). Ninety percent of the money loaned back went to buying American exports. This boosted the economy in the 1920’s. This boost quickly became one of the primary reasons for the Depression. During World War One, Europe had damaged its factories, and was unable to produce goods to match the quantity that was needed. America took advantage of this and became their producer. Along with exporting masses of goods to Germany, America also put high tariffs on imports to protect American business; “Starting with the Fordney-McCumber Act of 1922 and ending with the Hawley-Smoot Tariff of 1930, the United States increased many tariffs by 100% or more”(Gusmorino). While Europe needed these loans in the 1920’s they also needed the goods that they were producing to be bought by other countries. America retarded their income from exports and by doing so, started a chain reaction. With taxes so high on European imports in America their goods were not selling. This caused Europe to become unable to buy American goods any longer, and also unable to pay the interest on the loans that America gave them. This led to overproduction for many companies who were reliant on exporting their goods to Europe. It also led to banks

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