• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain how both the long-term and the short-term causes contributed to the great depression in the USA.

Extracts from this document...


Explain how both the long-term and the short-term causes contributed to the great depression in the USA. The Great Depression was caused by a number of long-term and short-term problems, in my essay I will discuss these problems such as: Unequal distribution of wealth and low wages was a major problem long-term problem. High tariffs from Europe in retaliation for the McCumber tariffs in America closed the export market to Europe. Farmers who were impoverished during the 'golden twenties' suffered greatly, the laissez-faire policy of the government meant that they did nothing to help the farmers and they were ruined. The banks policy on credit was very dangerous and was proven to be wrong. The bank's policy was a long-term cause and was really a symptom of the depression. There is always a depression after a boom, but what made this one so great? There was an unequal distribution of wealth throughout American as well as internationally. The profits made by the companies were not reflected in the workers salary. They were not receiving enough to sustain the boom. The average wage for industrial workers rose by about 8% between 1923 and 1929 but during the same period profits increased by 72%. An 8% increase in wages did not give the general public enough buying power to sustain the boom. ...read more.


The farmers had to sell their goods so they lowered the price, in some cases they lowered it so much so that they would only break even or even be in debt. The government did nothing to help the farmers. They were far more interested in industries such as car manufacture, where the profits were much greater. It was not only farmers in this position; the working class across America who were already poor became poorer. Since the working class of America was 43% this meant that they had a very big problem on their hands. This brings us back to the issue of misdistribution of wealth in America. This was definitely a long-term cause because the working class had been suffering, especially the farmers throughout the Golden Twenties so it was not as if it was a sudden problem. The banks policy towards money lending and credit was very wrong. They believed that with the prosperity of the country and the ever-strengthening economy everyone would be able to pay back their loans. The banks were also giving out massive international loans, in some cases the bank was giving out more money than was asked for. Many people as we already know were taking out loans form the banks and investing it in the stock market. ...read more.


Finally the Wall Street Crash, some people believe that it is the sole reason for the depression, but as you can see above there were many long-term causes and not just this short-term cause to contribute. The Wall Street crash in my opinion is more a symptom of the Great Depression. The Wall Street Crash was caused by the reasons above. But because of the Wall Street crash businesses went bust which caused unemployment. This means that there was less money to spend causing other businesses to go bust or cut back on production. More people are made redundant or wages cut, which again means there is less money to spend and more businesses go bust. Followed again by more unemployment eventually leading to the great depression. As you can see there was many cause for the Great Depression, but surprisingly there were more long-term causes than short. This is surprising because it seemed so sudden that the depression came about. One day everyone was rich the next everyone was poor. When we look closely at 'The Gold Twenties' or 'The Jazz Age' they were not as good as they were made out to be. There were still the farmers and the working class a massive 43% of the population who were classed as poor. The only real winners in the 1920's was the elite 1% of the population who had 19% of the total spending power throughout the country. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE USA 1919-1941 section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE USA 1919-1941 essays

  1. The crash (causes and consequences of the Wall Street Crash)

    Even after the crash experts failed to see the damage that had been done. Depression The Wall Street Crash had a devastating effect on the US economy and that of the rest of the world. Only a small proportion of Americans actually owned shares - less than 1% of the population.

  2. The Wall Street crash, the great depression and its how it affected the lives ...

    over the previous decade as well as the greater, more recent troubles following the Wall Street crash. They had been suffering gradually worse during the time before the Wall Street crash, even during the years of supposedly universal happiness. The years when the European farmers were largely incapable of producing

  1. Did the Wall Street Crash cause the depression?

    The Wall Street Crash was only the final trigger in causing the Depression not the loading of the gun. Overconfidence of the government and people was the loading of the gun. In conclusion, to answer the question " Did the Wall Street Crash cause the Depression" My answer would be " No!"

  2. 'The causes and effects of the great depression caused equal suffering to all of ...

    This source is very reliable and useful showing cause of Depression also this source is useful as it provides information on such industries and improvement which can then be backed with the help of source 2. Another reason this source is economical cause because it is supplying jobs for the unemployment which in turn helped more industries to recover.

  1. Explain the Causes and Effects of the Great Depression.

    What they actually did, however, was to "put off the day of reckoning" (Paul. A. p.2, 1996). Inevitably, after few years, most Americans stopped buying consumer goods as past purchases put them in great debts. As a result, many businesses were forced to close down suddenly.

  2. The Great Depression - "From Boom To Bust" - How America went from massive ...

    Many of the people speculating on the stockmarket did often have no experience. Many of these investors bought shares 'on the margin' where they were using borrowed money to buy shares. Between 1927 and 1929 American stockbrokers increased the amounts they had borrowed from $3.5 million to $8.5 million.

  1. The nature and the causes of the Great Depression of 1929 in America.

    In the evening, the vice- president of Wall Street bought shares at a value of $ 240,000,000 as banks and industry tried to stabilize the market. They achieved it for a longer period, but on the evening of the 28th of October, Monday, a new panic rose.

  2. The USA

    It set up three acts, the Social Security Act, which created a national insurance scheme, pensions was provided for the elderly, support for disabled people and unemployment benefit. The second act set up was the Wagner Act, which give rights to workers to join trade union and talk with employers for better working conditions and pay.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work