The great depression Essay Example | Topics and Well Written Essays - 1000 words

The great depression - Essay Examplestrophic collapse of declension-market prices on the New York Stock Exchange ( pitch blackness Thursday) in October 1929 remains the most severe economical depression experienced in America (Modern American Poetry1).Various factors caused the great depression. Apparently, the boom psychological science and speculative euphoria resulted in underlie weaknesses and imbalances within the U.S. economy that caused the great depression (Modern American Poetry1). The federal government and financial institutions lacked capacity to address the underlying weaknesses and economic imbalances. Indeed, the American government could not sustain the rising personal debt, increased production of goods, and imbalance between the rich and the poor leading to the express market crash of 1929. Economists assumed this was simply a correction of the market and hence did nothing to contain the situation. President Herbert Hoover underestimated the severity of the cris is and assured U.S citizens that the economic slump would not last for more than 60 days (WGBH Educational Foundation 1). Herbert did not consider governments intervention on the matter. Consequently, stock prices continued to fall in America. By the end of 1932, stock prices had dropped to 20 % of their 1929 value.Apparently, the great depression started in America and spread to other industrialized nations crossways the globe between late 1929 and early 1940s. The U.S had forged fundamental relationships with other European economies after the First World War that allowed the great depression to overthrow into a global economic crash (Modern American Poetry1). The First World War, war debts, and the need to pay reparations (Modern American Poetry1) weakened European economies forcing them to rely on America, which was the chief creditor after the war (Quah and Crowley 8). As such, the economic slump in America and the depreciation of the American investment credits to Europe fos tered economic challenges in Europe. Ideally, countries that were deeply