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The Great Depression is said to have many factors that play a role in the dramatic downfall of the economy

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Introduction

THE GREAT DEPRESSION The Great Depression was a worldwide business slump of the 1930's. This event ranked as the worst and longest period of high unemployment and low business activity in modern times. The Great Depression began in October 1929 when stock values in the United States dropped rapidly. Thousands of stockholders lost great sums of money and many of them were wiped out. Factories, banks, and stores closed down and left million of Americans jobless and penniless. People started to depend on the government or charity to provide them with food. The Great Depression is said to have many factors that play a role in the dramatic downfall of the economy. Several explanations and reasons are offered for this major event that occurred in 1929. The Great Depression was one of the main reasons why World War II (1939-1945) had to happen. This dreadful incident affected almost every nation. It caused a sharp decrease in world trade because each country tried to help its own industries by raising tariffs on imported goods. ...read more.

Middle

For this reason, the banks lent out their money in the expectation that the customer would pay back the money with interest after getting rich. Many factories lost money and went out of business because of this great tragedy. The desperation for work and money became so bad that people were willing to work for as little as was offered just so that they could have enough money for their own survival. They all knew that soon it was a fight for life or death. Even though during the 1920's was a prosperous period for business, most of the farmers did not flourish. They were producing more crops and farm products than could be sold at high prices and so the prices of farm products fell and they remained low through the 1920's and as a result to this, some farmers lost so much money that they could not pay the mortgage of their farm. These farmers then had to either rent their land or move. The factories that were expanding to accommodate the consumer were actually over expanding and making too many goods. ...read more.

Conclusion

Exports from the U.S. to Europe exceeded imports. American loans and investments largely financed the exports. The Smoot-Hawley Tariff Act of 1930 contributed to the drop of the Great Depression. This law greatly increased a number of tariffs. Taxes rose so high that other nations reacted by raising tariff on U.S. goods. The Great Crash of 1929 was the end result of WWI. It affected the rich, the poor, the factory workers, the farmers, the bankers, and the stock brokers. In other words, it affected everyone. The Great Depression is known to be the worst economic disaster in the U.S. history. Depression dealt a fatal blow to the ideals of liberalism, democracy, and capitalism. For this reason, this event is known to have caused many people to change their ideas about the government and the economy. This tragic event ended after nations increased their production of war materials at the start of World War II. This increased level of production provided many jobs and put large amounts of money back into circulation. The depression had a lasting effect on the United States government and on many Americans. ...read more.

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