The great depression is one of the most important economic events in the history of the United States. The depression began in 1929, lasted for nearly a decade. The impact of the great depression seems to be all over the world. Most countries affected by the bad economic depression. Many factors contributed to cause the great depression. However, one of the main factors of the great depression are a combination of very different distribution of wealth in the 1920s, the broad stock market hypothesis occurs at the end of the 1920s. Money distributed among the rich, far apart up between agriculture and industry in the United States and Europe and the United States. The distribution of wealth imbalance creates an unstable economy. Stock market kept artificially high due to excessive speculation of the late 1920s. However, it eventually led to the great market crash. This is the market crash, causing a depression misdistribution of eco in the Americas.
The cause of the great depression
The great depression affected not only the United States economy, but also the world economy. Some of the key factors of the great depression are listed below: the stock market crash in 1929: the stock market crash happened on black Tuesday, October 29, 1929. This is one of the main factors that caused the great depression. Two months after the original accident, shares have lost more than 40 billion dollars. Until the late 1930s, the stock market began again. However, this is not enough, America is in a State of the great depression. This situation is compounded by increased interest rates and money.
Bank failure: during the 1930s, a large bank failure took place 9,000 banks failed. Most deposits are insured. As a result, some people lost their savings due to the failure of the bank. Because of installment loans the uncertain economic situation survival problems, people who are ready to go for new loans.
Reduce acquisition boards: with the stock market crash and economic misery, fear of people from all classes stopped buying items and costs. As a result, the production of goods is reduced. This eventually led to a decline in employment. Like a lot of people losing their jobs, they could pay for the goods they purchased on the installment plan. As a result, their goods confiscated. Is the accumulation of inventory. About 25% of people are unemployed.
American economic policy in Europe: as businesses fail, the Government created Smoot-Hawley tariff in 1930 to protect American companies. The higher taxes levied to imports, leading to reduced between United States and foreign countries.
Conditions of drought: drought that occurred in the Valley of the Mississippi River in 1930, is also considered one of the causes of the great depression (although not a direct factor). As a result, the number of people who can afford to pay taxes, because of other obligations. Therefore, they will sell their children without a space. They moved to cities for work. Many farmers living on charity, along with their families.