The Great Depression and the Economic Emergency

 

 

Introduction

The great depression was an extreme worldwide economic depression that began in the USA. It took place at different times in different countries. It demonstrates how the economic global economy can decline because it was the deepest and took the longest time. The economic emergency is any of a wide variety of situations that make some of the financial assets lose their worth. Economic emergencies were connected to the banking panic and other downturns that connected with the panics.

 Foreign transactions are restricted by the Government to protect domestic producers from foreign competition. In most instances, this harms the consumers. When trade is restricted, the consumer gets commodities at very high prices for low-quality goods and the world output reduces. The stock market crash was one of the significant causes of the great depression (Cecchetti & Karras 1994). There was a decline in the purchases that were made covering the board. When the stock market crashed, fear and economic distress made people stop making purchases. This led to a decrease in the number of items that were produced hence a reduction in the labor force. Another cause was the failure of the banks which led to people losing their savings. The drought conditions that made people result in selling their farms as a result of not being able to pay their debts and taxes living them with no profits and no money for themselves was another cause. The development of the Smooth-Hawley tariff by the government that was meant to help the American industries made tax for imports very high. This led to little trade between America and the foreign countries causing the great depression.

President Hoover reassured Americans that all was well and that they should believe in the future of the economy in the country. Hoover believed that working hard yielded great results. The response of Hoover to the economic emergency was to individuals telling them to work hard and requested the business society to aid in sustaining the economy by keeping the employees and not to stop manufacturing. He pleaded with the industrialists to maintain their wages as America fought the economic panic and assure them that they had nothing to worry about. When it was evident that the economy could not get better by itself, Hoover thought that it was of importance for the government to intervene. He developed an organization that assisted state and private relief companies. He pleaded with people to make contributions that would help the less fortunate and as an example, he donated for worthy causes (Carcasson 1998). Hoover opposed the direct aid of federal government programs because he thought that it destroyed the stability of power between the states and the integrated government. The projects he supported were those that involved working and getting their wages.

Conclusion

The great depression affected the economy in a very huge way. Banks closed, businesses closed and people became unemployed. The stock market crash had a huge impact on the great depression. President Hoover believed in hard work and did not support the direct relief programs that were proposed. He urged individuals to make donations that would help the people in need. Hoover himself donated large amounts of money for worthy courses.

 

 

 

 

 

 

 

 

References

Cecchetti, S., & Karras, G. (1994). Sources of Output Fluctuations During the Interwar Period:

Further Evidence on the Causes of the Great Depression. The Review of Economics and

Statistics, 76(1), 80-102.

Carcasson, M. (1998). Herbert Hoover and the Presidential Campaign of 1932: The Failure of

Apologia. Presidential Studies Quarterly, 28(2), 349-365. Retrieved May 15, 2020, from

www.jstor.org/stable/27551864