Great Depression

1. There were quite a few factors that led to the actual depression. Some seemed like they would be less influential then others, but could still be considered very large factors. One of the less looked at factors is the season's condition. During the late twenties, there was a large amount of drought. Farmers and ranchers weren't making the money they usually did in order to pay for their houses, loans, mortgages and etc. Businesses in the U.S. began failing, so the government created a tax that would protect these businesses. They charged extremely high import taxes, which in turn led countries to raise their import taxes, making it difficult and expensive to trade. Banks were failing across the nation due to faulty loans... and the banks that hadn't yet closed were afraid to give out loans due to the economic situtation. Then on Black Tuesday, the stock market crashed, which is said to be the "straw that broke the camel's back." With the many banks failing, and the large stock market crash, people were afraid to purchase items. With no buying going on, there wasn't a large amount of cash flow to keep the economy strong.

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2. During the depression, many areas of the economy were hit pretty hard. Banks and factories were shut down, leaving many people jobless and unable to support their family's basic needs. They had to rely mostly on government in order to get food. Unemployment rates were the highest they had ever been previously, a rate of over 25%. People from other countries brought different rulers in to power in order to deal with the hardships. In Germany, Hitler was gaining a lot of power, people thought he would be able to run the country more profieciently. The Japanese people invaded China in order to develop industries and mines that they thought would help end the depression. Instead the Japanese and German action helped lead to World War II.

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3. Hoover was the President when the Great Depression began. Many people believed he wasn't doing alot to save the economy, because the effects seem to worsen every month. Soon, Franklin D. Roosevelt was elected. He had many ideas to pull the economy out of it's slump, and proposed the "New Deal." The new deal gave the government more power, and offered new jobs in different areas. The final thing that pulled us out of the Depression was World War II. With the production and distribution of ammunition and other war supplies, there was a good, solid amount of cash flow through the economy.

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