Causes of The Great Depression

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The Great Depression

It is said that the cause of the catastrophic stock market crash known as the great depression was due mostly to uncontrolled political and industrial systems otherwise known as capitalism. However, the timeline leading up to the Great Depression proves that many other factors played a role in the stock market crash that occurred in the decade of the 1930's. So lets take a look at rather four, factors contributing to the great depression that we will further discuss in the following paragraphs. Four of the main causes that led up to the great depression were unequal distribution of wealth, uncontrolled political and industrial systems, high tariffs and war debts.

Money was distributed mostly between the rich and the middle-class, in the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy this type of the economy eventually lead up to large market crashes. These market crashes, caused the American economy to be overturned. The total income in the United States rose from $74.3 billion in 1923 to $89 billion in 1929 this rise in the economy was due to the Coolidge Prosperity(Business and Industry was flourishing and big business became bigger so the stock market went up greatly) even after this boost in the stock market the money wasn’t making its way around equally because most farmers were still poor.

United States maintained high

1. tariffs on goods imported from other countries, at the same time that it was making foreign loans and trying to export products. This combination could not be sustained: If other nations could not sell their goods in the United States, they could not make enough money to buy American products or repay American loan...

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... June

1939 7.2 10.4 + 7.9 17.2

1940 6.9 9.9

1941 7.7 12.1

1942 10.3 24.8

1943 13.7 44.8

1944 21.7 45.3

1945 21.3 43.7

As you can see, Roosevelt began to bring the people out of the depression and that resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his Seven Fat Years ) When 1936 saw a phenomenal record of 14 percent growth, Roosevelt eased back on the deficit spending, overly worried about balancing the budget. Between 1940 and 1945, the Growth Deficit Product nearly doubled in size, from $832 billion to $1,559 billion in constant 87 dollars. And this occurred as deficit spending soared, to levels Keynes had earlier and unsuccessfully recommended to Roosevelt

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