The Great Depression

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The Depression was a period of time after the economic boom of the 1920's in America, when the economy went downhill. People lost money, jobs, shares, businusses went bankrupt and the farming industry suffered greatly. The Republic Government at the time lead by Hoover was still following policies of Lassez Faire so business was not getting the support it needed to get it back on track.

The Republic Governments Protectionist policies were one of the causes of the great depression. There were trade problems associated with their protectionist policies. The Republic Government made high tarrifs on imported goods. This was to make sure that the Americans were buying their own products. Buying American products meant that they would be keeping the money in their economy instead of sending it to other countries. Other countries, now unable to export goods to the Americans retaliated by increasing their tarrifs on american goods. America could no longer export their goods to other countries. Mass production meant that there was more goods being produced than what needed to be but because other countries had high tarrifs on American goods, they could not be exported. Output became greater than demand so goods cheapened in price. American goods were not being sold. This resulted in cut-backs in production which meant that there was less employment available so people lost their jobs. Profits being made lessened and so did the value of shares.

A lack of regulation in the stock market was also a cause of the great depression. Most shares that were changing hands were done so through borrowed money. Buying shares on the margin this way worked very well when share prices were rising. When prices began to slow down or cheapened in value however, trouble arose in the stock market. Seventy five per cent of share prices could be borrowed. This caused a lot of speculation which helped to increase share valuse further. The Federal Reserve Board gave easy credit to share holders and taxes were cut so that more money was available. This lack of regulation created more speculation which caused more share prices to increase.

The farming problems in the United States increased and were one of the causes for the depression. Because of mechanisation there was over production of goods by farmers. There were large surpluses of food. It could not be exported because of high tarrifs...

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...d unemployment was on the rise. people became homeless and had to live around the citys in slum areas they liked to call hoovervilles. suicide rose as a result of debts and the pressures being put on people who couldnt handle it. ill health rose as a result of poor hygene and living conditions. Elderly people were robbed of pensions and svaings and so had nothing to live for anymore.

Women before the depression had begun getting involved in the stock market. so during the depression they lost money like the men did. They were only a percentage of the people involved in the stock market however, it was mostly still men. Women also stopped buying as many labour saving devices during this time. African Americans during the Depression were mostly still working on farms. They suffered like the rest of the farming population with debts and surplus produce.

Hoover did not do all he could to stop the economic depression. he did what he believed in though, and he made attempts to get the economy back on track. He was only human in his actions, you can not do something if you dont feel it is right. and he was not going to help his nation if he thought he was going the wrong way about it.
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