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Causes And Effects Of The Great Depression In The United States

1606 words - 6 pages

The Great Depression is a defining moment in time for not only American, but world history. This was a time that caused political, economical, and social unrest. Not only did the Great Depression cause a world wide panic, it also caused a world wide crisis unlike any before it. This paper will analyze both the causes and the effects of the Great Depression in the United States of America.
One cause of the depression is the effects of World War One. World War one had many devastating effects on countries all across the globe. In the United States millions of lives were lost to the war, as well as huge amounts of money that had been used to fund the war. All across the globe vast destruction of property was found. This in turn caused a disruption of trade. Countries were more concerned with fixing their own economies than helping others via trade or other means. The United States had always preferred to stay more isolated than other countries, but were still feeling the strain. Soldiers coming home from the war were looking for jobs and were finding few. The few jobs available could not cater to the wounded or mentally destroyed. The United States had been a major player in the global economy and a loss of power and money for them deeply affected the rest of the world.
To stop Americans from hindering the United States' economy the government put high tariffs on imports and exports in place; this had the affect of hindering other countries profits, and eventually the governments plan backfired. The tariffs goal was to protect the American industries from foreign competition. For example, instead of going to Canada for cheaper goods, Americans would have to support local companies. This was a great plan in theory, but unfortunately it negatively effected the economies of other countries also trying to recover from World War One. To retaliate, other countries placed tariffs of their own on imported goods, effectively cutting demand for any American goods. The quote, “Economists still agree that Smoot-Hawley and the ensuing tariff wars were highly counterproductive and contributed to the depth and length of the global Depression” ( shows that the Americans original plan of protecting their own businesses only hindered them.
Another cause of the depression was the lack of prosperity for many groups, and the lack of spending that soon resulted from this. In the early 1920s we know that the United States had a high prosperity. What is less known is that not everyone was sharing the good times. Immigrants from most countries, including those in Africa and Mexico, were sharing the same poor treatment as the Aboriginals in the United States. These groups were not doing well socially or economically and had low paying jobs. Many Americans simply could not afford to pay for many goods, and this created a massive reduction in purchasing. Factory workers suffered greatly from the...

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