What Caused The Great Depression Essay

The main event that almost everyone remembers from their history class is usually the Great Depression, which was a period of economic downfall for the United States, but how did it begin? There were many factors that led to the Great Depression including, but not limited to, the stock market crash of 1929, the panic of 1930, as well as the increase in tariffs on imported and exported goods. These events ultimately led the United States to a major depression that took around 16 years to overcome. The first main cause of the Great Depression was the stock market crash of 1929. This was when a stock market panic occurred and caused around $10 billion to be lost in market value. Before the stock market crashed, many people were introduced to

For one, the government could have taken a better look at the banking system used when credit was in play. As mentioned by the Federal Reserve History, banks had ‘floating’ checks that were counted in two bank reserves, one where it was deposited, and one where it was drawn, so it was believed that the cash was in both banks. In truth though, “the cash only resided in one bank.” (Richardson, 3) Overall, it meant that there was less money available in reserves. If the government had paid more attention at the time, this problem could have been avoided. Along with that, regulating the stock market and who could and couldn’t use credit could have also prevented the Great Depression. During that time, everyone could use credit whether or not they could pay the loans back. If it had been managed so only people who were financially stable and could pay back the loans could use credit, things would have gone differently. To add, more jobs should have been created to counteract the unemployment rate. Finally, the government should have reduced tariffs as it was evident that the Smoot-Hawley Act was not beneficial to the US during that time. Although these actions could have prevented the Great Depression, I do not think I would change the course of events. This is because, through this depression, the US was able to learn and grow from their mistakes and use these lessons in the future to prevent it from happening