What Caused the Great Depression?
What Caused the Great Depression? The Great Depression, one of the most significant events in American history, occurred immediately after a time of great prosperity in the US, The Roaring Twenties, and was caused by a number of factors. Immediately following WWI the US economy began to experience a boom in growth and production. Most of Europe, the former capital of world commerce, was destroyed as a result of WWI which made the US the biggest exporter of goods on the planet. With the US now becoming the center of global trade the economy began to flourish. The Progressive era helped businesses in the US shed their bad reputations of being corrupt in the eyes of the public which also helped them grow drastically. Increase in demand for goods from the US also spurred business growth and increased the average family income. With this new surplus of revenue, American citizens began to purchase more and more goods which spurred the industrial business since demand began to outpace supply.
At the time of this economic boom, the agricultural sector of the US began to decline in growth. More and more jobs were being pushed out towards the cities which led to less people working on farms since most Americans saw big cities as being the best place for opportunity and income. The price of farm products was also on the decline during the 20s and this decline in prices lowered the profits for farmers. Farmers accounted for nearly one-fourth of the nation’s workers and this decline in income, to an average yearly income of 273 dollars, began to weigh down the nation’s economy since the average for workers in other occupations was 750 dollars a year. Agriculture was once the foundation of American economy before industrialization. Without this consistent and solid foundation the American economy became too dependent on industries that had a tendency to fluctuate from profitable to non-profitable.
The long profitable and major railroad and coal industries