Reasons And The Causes Of The Great Depression

When referring to the Great Depression, the economic from 1929 and continuing through most of the 1930s is usually what is being referenced. (great depression, n.d.) The causes of this depression were many and varied, five of the top were: the stock market crash of 1929, bank failures, reduction in purchasing, America 's economic policies, and drought conditions. Throughout the 1920 's the U.S. stock market underwent rapid expansion, caused by a period of wild speculation. That is until 1929 when production had declined and unemployment rose. This caused the value of stocks to exceed their real value. In September 1929 the stock prices began to decline, by October 18 a true fall began. October 29, 1929, is a date that has become known as the

As bankruptcies became more common, people had less faith in the banking institutions. Many decided to withdrawal all of their money from the banks a phenomenon known as Bank Runs. This caused banks to need to liquidate all of their assets, and several banks to fail, about 650 banks failed in 1929 alone. The closing of banks affected even those who were not affected by the stock market crash. So the sudden lack of financial confidence led to bank failures, which in turn advanced the depression creating what we know today as the Great Depression. (History.com Staff,

In a world wide stage the Depression grew partly because Great Britain, which had long underwritten the global financial system, was no longer able to play this role. Great Britain became the first to drop off the gold standard. Although the United States may have been able to step in at this point, the government was to preoccupied with economic difficulties with in it boarders, and also dropped off the gold standard in 1933. At the London Economic Conference in 1933, leaders of the world’s main economies met to resolve the economic crisis, but failed to reach any major collective agreements. As a result, the Depression dragged on through the rest of the 1930s (The Office of Historian.) The Smoot-Hawley Tariff was created to help protect failing American companies. This tariff placed a high tax on imports from foreign countries. The unintended consequence was less trade between America and foreign countries, and some countries retaliated. These policies added to the problem of not enough products being bought, in this case being exported, and so fewer employs were