The Primary Cause Of The Great Depression

The Great Depression was a notoriously detrimental consequence of risky financial management, insufficient distribution of income, lack of government policy, and economic protectionism that preserved throughout the preceding years of 1929. With a dramatic shock to the stock market, the United States was the victim of a total economic collapse—the most severe decline of the modern industrial world. Throughout the 1920s, the stock market upheld substantial price increases because of the ideology of investors that believed that money could be easily managed to produce a significant profit. However, consumers were borrowing, expending, and investing finances at a rate that did not equate to their actual income. Although the overall production of …show more content…
Although the Great Depression has a formal initiation with the stock market crash on October 29, 1929; yet, the majority of economists and even President Hoover himself believed that the economic downturn was more than just the stock market. Within his Memoirs President Hoover states, “The primary cause of the Great Depression, was the war of 1914-1918.” After the United States and other nations involved in World War I declined in the need for imported foreign goods such as, cotton and steel, these competitive nations took a protectionism approach to attempt to protect national businesses. Additionally, almost every country conceived the notion that protecting their businesses from foreign trade was one of their top priorities. Following Black Tuesday, the Great Depression was comprised on of an extended and severe length of high unemployment rates, low consumer input and oversupplied company output, lack of confidence in the economy, and displaced savings of the average …show more content…
During the initiation of the Great Depression, this nation was led by a president who believed in extremely limited government and that the economy should naturally recover. However, the majority of the country disagreed and elected Franklin Delano Roosevelt to take over in 1933. President Franklin Roosevelt took immediate action to reduce the effects of the Great Depression by urging Congress to pass several controversial pieces of legislation known as the New Deal. The New Deal was a somewhat effective strategy that required significant government interference within the economy to stimulate employment, and the economy. At the time of the Great Depression, the United States relied heavily on agricultural production and Franklin D. Roosevelt utilized this significance to orchestrate the Agricultural Adjustment Administration. The purpose of the Agricultural Adjustment Administration was to help alleviate the plummeting farm prices. Ultimately, this development has afforded farmers protection from drastic weather, high competition, and deficit producing. Additionally, the National Industrial Recovery Act was focused on improving employment and establishing labor protection laws for the desperate and vulnerable American. Further, workers received federal input on minimum