Great Depression Dbq

The Great Depression in the United States brought an end to a long era of economic expansion and social progress which had been in full bloom since the 1890s (Mitchell 1947). There had been monetary recessions in 1907, 1913 and 1921, but these reversals were never severe enough or long enough to shake the deeply rooted confidence in the American economic system or to generate any widespread national discontent. Many history books tell of the depression of the '30s; they often begin with the stock market crash of October 1929 (Estey 1950). Among economists, a tendency to decry the importance of the crash as a cause of the depression: "The crash was part of the froth, rather than the substance of the situation" (Shannon 1960). The fundamental
For industry, the 1920s had been marked by prolonged prosperity. This was particularly notable in the field of construction and other capital production. During this period, there was an unusually large expansion of credit because of easy-credit policies which resulted in increased profits (Soule 1947). As often happens following a period of prosperity, cumulative strains brought about a downturn in the economy. The production of the nation exceeded its capacity to consume. Since there were no restrictions by the Federal Reserve Board, too much credit was used for speculation on the market (Soule 1947). In the second place, the economies of many countries were still suffering from dislocations caused by World War I. Although the world had begun to resume its normal progress, the international economy remained unstable. After receiving help with its trade deficits, war debts, and reparation obligations, Western Europe became financially dependent on the United States (Hacker and Zahler
But in 1936, there was another downward movement of the business cycle. By the middle of 1938, the economy began to improve again, but the depression remained. It was not until 1940, after the outbreak of war in Europe, that the volume of industrial production improved to equal the 1929 record. The Great Depression did not end until war and defense spending stimulated the economy once again (Estey 1950).
What was the importance of the Great Depression? It was unprecedented in length, causing numerous changes in American society: in politics, economics, social values, and formal culture. Of primary significance is the fact that the depression was a phenomenon caused by one world war and alleviated by