Another problem was the declining in exports. In the 1920s American tariffs began to increase therefore the demand Europeans had for American ... ... middle of paper ... ...ion. It did not work the economy continuously deprecated. Before the crash of the stock market Hoover came up with an Agricultural Marketing Act, the government would help farmers maintain prices instead it stiffened exports on food. Hoovers popularity chronically decrease, there were Americans that blamed Hoover himself for the depression.
After World War I, the price of food began to drop causing some dramatic effects on the United States economy. Americans faced a big impact on the Great Depression that made millions of people lose their jobs and were forced to leave their farm land. Many people, even those who could not afford it, invest all their money in stocks. Some even borrowed money to buy stocks. Prices of farm products fell sharply economic losses were aggravated by a drought.
A banking crisis then swept across America, as the confidence of the American public fell. In 1929, 659 banks failed due to unpaid loans. As a result people stopped trusting banks and withdrew their savings. This in turn led to more banks failing. People in agriculture were hardest hit by the Depression because the 1920’s had not been kind to them anyway.
Some of the main causes of the great depression were that there was overproduction of food and also industrial parts, banks gave out too many loans and at the end people could not pay them, and also the stock market crash of 1929. Farmers in the western world produced more food than Americans needed. Farmers then couldn’t sell the food and then lost their farms. Industrial workers produced too many things. Workers couldn’t buy goods.
Hoover plan was to beat poverty; but, he caused more people become poverty-stricken. He became very unpopular amongst the people in the United States. Unsuccessfully, his plan did not work for the betterment of the American people. The Great Depression Causes The causes of the great the Great Depression were over expansion, speculation, bankruptcy and a pattern that has repeated itself through out the United States history. In a five time span Americans salary did not equal to their contributing.
Due to this, a global excess of agricultural products, decreased profits and prices. Many farmers could not make money off of their crops, so they also could not pay back loans from the bank. This weakened banks and forced them to close. In addition, American factories were making most of the world’s goods. There were large profits being made, but there was an unequal distribution of wealth, which made the rich, richer and the poor, poorer.
There were many elements that led to the Great Depression like the stock market crash, bank runs, the dust bowl, and the new deal. The Great Depression was an economic downturn between 1929-1939. Many people lost their jobs and did not have enough money to keep a roof over their head. Only the rich could manage while the unfortunate grieved. Both the rich and poor were petrified, and the rich even concealed their money so no one could take it from them.
Most of the nation’s banks also failed because they had to put the depositors money in the stock market to increase but when it crashed people lost most of their money. Many people started to lose faith in the stock market and “you can’t have a healthy economy without confidence in the market.” When banks and businesses started to close many people became unemployed and then people can’t afford food for themselves or for their family. People started to take loans from banks but then couldn’t repay the banks and the banks couldn’t let their depositors withdraw any money because it is all gone or given for loans. From the start of the depression the United States economy was going down day by day. President Roosevelt had closed all the banks for three days and then some banks opened backed up with strict limits on withdrawals.
The government was trying to isolate America from the rest of the world so they passed the Fordney-McCumber Act (1922) and the Smoot-Hawley Act (1930), both of which imposed high import tariffs (taxes) on all good being imported into the US. This was to try and protect the domestic market. At first these acts were doing well but then it became America’s downfall as she relied too much on her own domestic market. Other countries also started imposing import tariffs, cutting the US off from world trade and thus isolating them completely. The Republicans preferred for businesses and the industry to grow, rather than the agricultural sector.
In 1929 the stock market crashed, triggering the worst depression ever in U.S. history, which lasted for about a decade. During the 1920s, the unequal distribution of wealth and the stock market speculation combined to create an unstable economy by the end of the decade. The unequal distribution of the wealth had several outlets. Money was distributed between industry and agriculture within the U.S.; in social classes, between the rich and middle class; and lastly in world markets, between America and Europe. Due to the imbalance of the wealth, the economy became very unstable.