The Fail Depression: The Causes Of The Great Depression

Depression as an economic term is a long and severe slump or downturn in an economy or market. One of the most famous and catastrophic depression in history of the United States is the Great Depression which occurred in 1929 and lasted for 10 years after. It was the deepest and long lasting economic recession in the history of the industrialized western world. It is not possible to point out only one factor of the Great Depression because it was a combination of domestic and international conditions that led to the downfall of the American economy in 1929.

After president Hoover was elected president in 1929, the United States enjoyed only a short period of economic prosperity. Although America had become the world’s leading economy, it did not help in rebuilding Europe’s economy after World War I. The Republican administration demanded repayment of their war loans from the Allied nations creating more debts and reparations that shattered Europe’s economic power. Furthermore, to help protect American companies, the United States enacted tariffs which charged a high tax on imports from foreign countries. This interrupted other nations from selling goods to America. In turn, fewer sales prevented the foreign

Companies were ruined and people lost their trust in banks. The crash of 1929 was not the sole factor but most certainly a great cause of the Great Depression. By 1933, when President Hoover left the office, the Great Depression turned the U.S. economy into disaster as national income declined from $88 billion to $40 billion dollars, the unemployment rate stood at 25 percent, and more than 9,000 banks were closed. The effects of the Great Depression lessened only when Franklin D. Roosevelt was elected president in1933 after President Herbert Hoover. His relief and reform measures recovered the American economy from depression that plagued the country from decade