What Caused The Great Depression Essay

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The Great Depression that began in the autumn of 1929 was the worst in American History. The Depression has become one of the most significant events in economics and has preoccupied some of the biggest names in contemporary economics. It was an event that exemplified the importance of strong and solid institutions and bureaucracies. The Great Depression was not caused by a single event or one particular institutional failure; instead, it was a culmination of various different factors which resulted in the absolute downward spiral of the American economy in the 1930’s. The Depression caused want and misery all across the United States and lasted longer than any other depression since or after. The foundation in which the American economy was…show more content…
The proliferation of investment trusts and holding companies had caused many opportunistic business vultures to abuse the corporate structure by siphoning off company profits and reducing opportunities for independent start-up companies. Mergers and trusts aimed at erecting barriers to entry for smaller companies. The foreign trading position of the United States was also questionable. The federal government had set high tariffs in order to protect its local industries from foreign competition, but the result of this policy was that the administration had to embark on large scale loans to importing countries. The only way foreign countries could cover their adverse balances of trade was through American loans. But when the economy ran into difficulties in 1928, lending was curtailed and as a result, exports…show more content…
Ironically enough, the homeless citizens lived in cardboard houses which were called ‘Hoovervilles’. Herbert Hoover was a self-made man, who became a millionaire at the age of 40 and was cheered on all the way to his executive seat. He held firm to his ideological beliefs even in light of the economic realities on the
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