Brenna L. Shedd
There were many causes of the Great Depression, some of which include “The Great Crash” of the stock market, lack of spending by the average person, the Smoot-Hawley Tariff Act and a massive drought in the Mississippi Valley. From this nation-wide crisis came Social Security as we know it, the creation of the Tennessee Valley Authority Act, the creation of the SEC and stricter banking and stock market regulations. Overall the Great Depression had a large impact on The United States that can still be seen today.
Causes of the Great Depression
In January of 1929 an editorial (Encyclopedia of American Studies, 2010) said “It has been twelve months of unprecedented advance, of wonderful prosperity. If there is any way of judging the future by the past, this new year will be one of felicitation and hopefulness.” This was obviously not the case. When the stock market crashed on October 29, 1929, it was possibly the greatest contributing factor to the depression. Some believe, though incorrectly, that the “Great Crash” is the same as the great depression.
The stock market crash had people scared to spend money. People no longer bought nearly as many products which led to a drop in production, which in turn led to layoffs in the work force. Coupled with these layoffs, were huge debts being defaulted on by stock holders; this all inevitably to the failure or closing of many banks.
The Smoot-Hawley Tariff Act was passed in June 1930 to protect farmers affected by the Great Depression from foreign producers. This Act raised the tariffs or taxes on imports to a new, unprecedented high. It was originally intended for agriculture but after it finally passed, it extended to nearly all parts of import.
A massive drought occurred in the Mississippi Valley in 1930. This was not a direct cause of the Great Depression; it was a large contributing factor. In the Dust bowl, as this part of the...