An analysis of the economic aspects and effects of the great depression in the us

Additionally, wages at that time were low, consumer debt was proliferating, the agricultural sector of the economy was struggling due to drought and falling food prices and banks had an excess of large loans that could not be liquidated.

An analysis of the economic aspects and effects of the great depression in the us

Temin, Peter, and Barrie Wigmore. Many Americans began pulling what money they had left out of the banks, preferring to hoard it or buy gold instead. Between August 1, , and May 1, , in three steps, the Fed doubled reserve requirements for all classes of member banks, wiping out much of the excess reserves, especially at the larger banks. Though landowners were supposed to share the payments with their tenant farmers, they were not legally obligated to do so and most did not. Alexander Field argues that the uncontrolled housing investment of the s severely reduced housing investment in the s. By there were , paid civilian employees, and there were 1,, in He quickly lost control of the bill and it ended up protecting American businesses in general with much less real protection for farmers. These figures are suspect, however, because we know that government estimates of the value of munitions spending, to name one major area, were increasingly exaggerated as the war progressed. The global adherence to the gold standard , which joined countries around the world in a fixed currency exchange, helped spread economic woes from the United States throughout the world, especially Europe. Bank accounts were being withdrawn en masse, and the banks did not have the cash on hand necessary to cover all withdrawals. Although an increasing number of economists have come to doubt this view, the general public still accepts it. There is less agreement on why the contraction phase was longer and more severe in some countries and why the depression lasted so long in some countries, particularly the United States.

Library of Congress, Washington, D. The Federal Reserve did not give aid to banks and thousands of smaller ones collapsed, in part because the Fed declined to create more cash as the money supply tightened.

Brunner, Karl, ed. Panicked investors began selling their shares in an unprecedented volume; the Dow had been gradually declining since its peak in early September of that year and investors feared the worst. It was a time when thousands of teens became drifters; many marriages were postponed and engagements were interminable; birth rates declined; and children grew up quickly, often taking on adult responsibilities if not the role of comforter to their despondent parents.

In many countries, government regulation of the economy, especially of financial markets, increased substantially in the s. Other countries retaliated.

great depression in usa

Public opinion surveys of business at the end of the s provided evidence of this regime uncertainty. The Depression affected virtually every country of the world.

the great depression summary

The American economy entered a mild recession during the summer ofas consumer spending slowed and unsold goods began to pile up, which in turn slowed factory production.

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Great Depression: Causes, Effects and History