The Great Depression

Topics: Wall Street Crash of 1929, Great Depression, New Deal Pages: 3 (775 words) Published: December 6, 2014
The Great Depression

There is a general agreement that the depression caused from several causes, not just one. But, it caused the economy of the countries by the world war. An example, “For a few weeks it isn`t so bad for man and his wife and a baby to get along on $4.80 a week, paying $3 of it out for rent” interviewed a young man on federal work program. The federal government responded quite differently to the prosperity of the 1920s and the Great Depression that followed. Roosevelt's New Deal was not only a decisive plan to combat the Depression, but it also marked a new direction in the role of government in managing the economy.

Agricultural prices had already been low and the over production during the 1920s, leaving farmers unable to spark any sort of recovery. When the Depression spread across the Atlantic, “Europeans bought fewer American products, worsening the slide. Prices of products fell about 40% by 1921 and remained low the 1920s”. Farmers were producing more than American consumers were consuming with new machines like tractor. Some farmers lost so much money they couldn`t pay the mortgage on their farm. Farmers had to rent the land or more. “The women in these areas were not buying the latest rayon undergarments, nor were they trimming their hair and their dresses short, or enjoying the newfound glitz of the Jazz Age. They were still sewing their own clothes, patching holes in their husbands' shirts, and making dresses stretch from one daughter to the next. They still slaughtered their own meat, grew and canned their own vegetables, and in many places bartered for what they could not produce. Survival skills took precedence over cultural sophistication”. Overproduction was a reason for great depression.

The fundamental structural weaknesses in the American economic system. Banks operated without guarantees to their customers, creating a climate of panic when times got tough. Few regulations were placed on banks and...
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