Main Causes Of The Great Depression In America

What were the main causes of the Great Depression in America?

Introduction:

With the collapse of the U.S. stock market in October 1929, the U.S. economy quickly entered a recession, and gradually spread to the world. After more than two years of struggle, the world economy comes into a more serious depression.

The Great Depression was the longest, deepest and most widespread depression of the 20th century. It originated in the United States.

Causes:

The Great depression was based on a variety of reasons. And it began in the 1929 the New York stock market’s big slump and spread a vicious circle. That affected the whole America and even the whole word.

Primary Causes: Capitalist society had productivity develops rapidly after the two

The stock market’s expansion raised the false prosperity in the beginning of 1929. And large amounts of foreign capital into the United States greatly enhanced the financing capacity of the Bank of America; promoted the loans from the Bank of the United States. Because Americans as a shortcut to wealth stock. People not only put their own savings all into, but also the bank loaned to buy stocks. This had the stock price was crazy to arise. That behavior had greatly increased the instability of financial market. American prosperity was based on an unstable condition. National income was inequality. The gap between the rich and the poor was scale-up. Market was decreased. The false prosperity increased and concealed society conditions. The limited the growth of social actual spending power and resulted in a relatively small

Drought Conditions make food to decrease. The price of foodstuff has been increasing. People cannot pay their taxes or debts. They have to sell their land. People 's burden is increasing. That is one of the reasons.

Conclusion:

The Great Depression has many reasons. But they are all based on a vicious circle.

The fundamental problem is the industrial development under, agricultural products devaluation and wages too low, lower class does not have the purchasing power, wealth is concentrated in the upper hand, the circulation of money appear obstacle. So the Roosevelt New Deal through a series of social reforms, enhance the income of the lower class, the security purchasing power and restart the business cycle. By the business productivity increasing, society supply enhancement. But demand cannot follow the productivity. It results social unemployment. Labor income is reduced, but the labor time is increasing. The society is in a state of oversupply. Follow the by the corporate failures and more people out of work. Thus society starts repeating the vicious