What Are The Causes Of The Great Depression Inevitable

The Great Depression in 1929 was the severest and most prolonged economy collapse in the history of America. The stock market and the banking system collapse in 1929, and in the past of the years the crisis grew worse. American banks closed to avoid bankruptcy and unemployment reached twenty-five percent for the rest of the decade. The Great Depression did not end in the American economy, it extended around the world and became one of the most traumatic experience for millions of Americans. American social and traditional values were reinforced to survive and restore themselves to prosperity and success. The Great Depression changed many aspects in American life, and all the efforts to save the market failed. However, what caused the Great Depression and what made it so severe? Could the United States have done anything to prevent the Great Depression or was it

inevitable?

The causes of the Great Depression occurred from the lack of changes and the credit structure of the American economy, the maldistribution of purchasing power, and the America’s position in the international trade.

The American economy had depended on a few basic

industries, automobiles, and constructions. The economy had not developed a strength to survive and compensate the decline for most than nine billion dollars. As well, the credit and the debt structure contributed to the Depression. Farmers were not capable to pay off what they owed because farmers were deeply in debt and small banks were in constant concern as their customers defaulted on loans. Many investors force to their banks to make deposits in cash when some of the biggest nation’s banks were investing in the stock market to survive the crisis, but the market crashed and banks were forced to liquidate loans to supplement their cash reserves. However, American banks began to make large loans to European governments, and paid off their earlier loans. Nevertheless the cause of the crisis was not the result of monetary contraction, but more a decrease in investment and consumer spending.
The weakness in consumer demand was the result of a maldistribution of purchasing power. The deficiencies of the market brought not enough consumers, besides the agricultural and the industrial production increased and the proportion of the profits was not in focus of potential consumers. Many families in America lived below the minimum subsistence level, they were just being able to eat and many private charities and the public relief system attempted to supplement the condition of millions of Americans; farmers left their homes in search of a better life condition. Wages fell and buying power decreased after the stock market crash; business slowed down production and began firing their workers. During the economic crisis, it was illegal for more than one member of a family to hold a federal civil job, and no woman whose husband was employed should accept a job, but did not stop them from doing it. Many single and married women worked during the Great Depression because their families needed the money. Black men and women suffered massive unemployment, because unemployed whites believed they had first claim to work in the same jobs as the African Americans.
The last but not least major problem that caused the Great Depression was the American position in the international trade. The demand for American goods began to decline, and Europe lost interested in American agriculture. Besides some European nations had financial difficulties, they became more productive and increased their own industry and agriculture. Herbert Hoover, the current president during the Depression, begun to construct a program to assist the agricultural economy, protecting American farmers from international competition by raising agricultural tariffs. Besides all the European nations allied with the United States owed large sums of money to American banks, they would provide them with a way to pay their own debts, but did not happen. United States were in a devastating position worldwide, the only way to pay were piling up new and greater debts. Hoover, believed that the government should not intervene in the economy and it was not responsible for creating jobs to provide an economic relief for all the Americans at this time.
The American economy had never suffered for severe changes before the Great Depression in nation’s history.

The Great Depression was inevitable because America did not have policies capable of dealing with a huge crisis and the industry was not strong enough to cover the demands. The capitalist system survived but the American life changed drastically. The failed presidency of Herbert Hoover, who did not take any precautions to benefit all of society, created a strategy to encouraged businesses and factors to keep prices high, but the amount of money in circulation began to fall, and it was necessary to adjust prices, labor, and capital. Hoover did not believe in government solutions and end his presidency term without any legislation or solution to enable the economy to begin to grow and

prosper.