United States History, Great Depression

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United States History, Great Depression

Topic 1

One of the reasons for the Great Depression was the downfall of the banking sector. The banks were not monitored in areas of lending and the investments they made. Since the economy was not controlled by the government before the great depression, their lending rate was very high and they made questionable investments as well as investing their client’s money in the stock exchange. When the stock market crashed, the banks lost a lot of money. At the same time they could not depend on the money they had loaned to people because they were unable to pay them (Berkin, 722).

The second reason for the Great Depression was the crushing of the Agricultural sector. The years of prosperity saw the United States farmers benefit fro selling their produce in the local market. During the era of President Coolidge, they were unable to sell their produce in the international market because the president did not sign the bill that would allow the government to sell agricultural produce in the international market on behalf of farmers (Berkin, 728).

The third contributor of weakness to the economy was Hoover’s idea to create a Reconstruction Finance Corporation meant to benefit average citizens. Taxpayers’ money was used to develop this corporation which at the end only helped those in the big corporations who had access to the money (Berkin, 724). Hoovers intention was to restore the economy to where it was, but the idea of the corporation backfired on the nation contributing to the Great Depression.

Topic 2

The United States was enjoying a long period of prosperity before the Great Depression of 1929. Many including the secretary of treasury thought that the depression was a temporary thing and would come to pass making the economy of the United States even stronger (Berkin, 723). However, this was not the case because the depression led to the failure of the economy. The years before the Great Depression were characterized by political policies by President Coolidge. His policies on the economy clearly stipulated that the economy of the United States was not the business of the government.

As explored by Berkin in his book Making America: A History of the United States, the poor policies implemented by president Coolidge and his successor president Hoover are the main causes of the Great Depression. The economy of the United States had been left like a free market where all could do whatever they pleased without the intervention of the government. The banks were not controlled by the government and they invested their clients’ savings in the stock exchange and other unsound investments. With the crushing of the stock exchange and collapse of the economy, this was a major contributor of the economic downfall. The agricultural sector also collapsed due to the same issue that involves the failure of the government to interfere in the economy. Hoover’s response to this issue by creating a Reconstruction Financial Corporation only made the situation worse. The people felt that these policies had to be changed because the Great Depression not only affected them, but also other countries. When Roosevelt declared his candidacy he was elected as the president of the United States.

Works Cited

Berkin, Carol., Miller, Christopher., & Cherry, Robert. Making American: A History of the United States since 1865, Volume II. Florence: Cengage Learning, 2010. Print.