Western Civilization the Great Depression Term Paper

Pages: 5 (1422 words)  ·  Bibliography Sources: ≈ 7  ·  File: .docx  ·  Level: College Senior  ·  Topic: Economics

Western Civilization

The Great Depression

This is a paper on the Great Depression. There are four references used for this paper.

Throughout American history there have been occurrences which have had a dramatic impact on thousands of people. It is important to look at the Great Depression and its causes in order to gain a better understanding of this crucial incident of the 20th century.

What Was the Great Depression

The Great Depression began when the stock market crashed in October, 1929, creating "such a shock to most Americans that some early attempts to explain their causes blamed sunspot activity or medieval prophecy. A few held it to be a divine retribution on a people who had indulged themselves in a decade of hedonism after World War I and were due for a sobering experience. Others recognized that the 1920s that brought hints of an agricultural recession, amid uninhibited business speculation (Unknown)."

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Term Paper on Western Civilization the Great Depression This Is Assignment

When Herbert Hoover was elected President in 1928, Congress was mainly Republican, however he did not feel he had his party's full support. This relationship was reflected prior to the start of the Great Depression when Congress voted on a plan to deal with farm surpluses, which Hoover disagreed with. This was a "complex plan under which agricultural exporters would receive treasure certificates representing the differences in cost of production between the United States and other nations. This plan did not call for federal buying and storing of farm products, but tried to subsidize the shipment of surpluses overseas (Byrd)." While the plan passed in Senate, it died in the House of Representatives. Hoover supported the "Agricultural Marketing Act of 1929, which established an eight-member Federal Farm Board to promote agricultural cooperatives to market farm commodities at home, to further crop diversification, and to attempt to stabilize farm prices. Farm bloc senators however, were upset about Hoover's appointments to the Farm Board, stating 'These men have grown, and grown fat, have become millionaires, all from the money they have received from the farmers of America, while the farmers have been going down and down through bankruptcy and mortgage foreclosures (Byrd)."

President Hoover's Responsibility and Response

The crash of the Bull Market in October 1929 proved to be the most trying event of Hoover's presidency and its Congress.

Despite the effort of prominent bankers and investment brokers to stem the tide, the price of stocks slipped lower and lower, wiping out investors who had bought on the margin and depreciating the paper value of all stocks on the New York exchange by some $26 billion, a 40-percent decline in value. The crash ruined investors, dried up investment capital, and shattered confidence in the economy, plunging the nation into its worst depression (Byrd)."

President Hoover blamed the Great Depression on "international factors. He argued that world trade had deteriorated in the late 1920s because European states had not recovered from the effects of World War I, stating 'the European disease had contaminated the United States (Unknown)."

Effects on the World

The Great Depression had a profound effect throughout the world. The Hoover administration "was at fault before the crash in allowing the underlying weaknesses of an apparently buoyant economy to go unchecked. Its reaction to the onset of the depression failed to restore confidence, through a reluctance to use federal assistance and employ federal controls (Unknown)."

No True Consensus

The Great Depression is still not understood clearly. "Economists have offered many theories for both the massive decline and the slow recovery of output during 1929-39, but no consensus has formed on the main forces behind this major economic event (McGrattan)."

Economic historians have tried to explain what led to the Great Depression, and these efforts have "been characterized by a degree of 'theological' controversy. This divides adherents of the various economic philosophies, communist and capitalist, monetarist from Keynesian and others. Their lack of consensus in explaining the Great Depression stems from these distinctive philosophical starting points (Unknown)."

Theories

There have been a number of theories of what brought about the Great Depression. Some of most prominent theories "blame the Great Depression on frictions in labor and capital markets. The sticky wage theory is that wage stickiness together with a monetary contraction produces a downturn in… [END OF PREVIEW] . . . READ MORE

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