The Great Depression

Running head: THE GREAT DEPRESSION

The Great Depression

The Great Depression

The Great Depression was an economic depression that happened the decade after world war two in 1929. This was the longest and most widespread economic depression of the 20th century. There are many reasons why the great depression started. The five main reasons for starting the great depression are the stock market crash, bank failures, reduction in purchases across the board, American economic policy, and drought conditions.

The depression started in the united states with a stock market crash on 1929 october 29th. Two months after the real stock market crash the stockholders lost more than 40 billion dollars. The stock market crash started a decade of unemployment and poverty. The reason for the crash is still uncertain the usual suspicions are growing wealth inequality or cutbacks in foreign trade. Even though the stock market started to regain some of their losses but it was just not enough and, that's when we started to really go into the great depression.

With the stock market crash and fear of economic woe's people stopped purchasing items. This made the factories not produce more items. Then, they had to let people go and as people lost jobs they weren't able to pay for bills and their things were getting repossessed. The unemployment rate rose over 25% and this made it harder for the board to deal with the economic situation.

Over the great depression and the 1930's over 9 thousand banks failed. The banks were uninsured and because of this people kept losing their life savings. The banks that weren't failing only cared about their own survival and stopped giving out loans to people.

As every ones businesses were failing, the government created a economic policy with Europe. This was called the Smoot Hawley Tariff. This Tariff was first intended to help protect domestic farmers from agricultural imports. However this did not help end the great depression it caused even more suffering. This tariff and other ones actually made a decline in international trade. This made the US import to Europe decline from 1,334 million to just $390 million from 1929 to 1932. At the end of this trade went down 66%.

The Great Depression did not only effect the government it effected many people and families. But, it did not affect people in the same way. Many rich families weren't even effected at all. Actually, forty percent of people weren't affected.

The people that were affected had a very hard time. Most of them lost their jobs. At the worst point of the great depression the unemployment rate fell below 10%. This was