Great Depression
Great depression was a severe economic crisis impacts almost all Americans during that time. The implications of the Great depression severely disrupted the businesses every where in America. However the causes of the Great Depression are not one. There are several causes from inside America as well from global conditions responsible for the cause of Great Depression. The implications of the Great Depression not just confined to America, however they were sensed far away locations like the Germany in Europe, which lead to the cause of Extremism, which created the scene for WW-II.
Some Of The Key Causes For The Great Depression,
(i) Stock market crash that happened in the year 1929, is very serious cause that impacted the American economic conditions. Almost $40 billion dollars of American investment got vaporized on the same day, which is called as Black Tuesday, October 29, 1929. Though some of the losses happened due to this stock market collapse got regained in the next year 1930, the overall loss was irrecovered and this lead to the Great depression in the country.
(ii) Almost 9000 banks got failed in the year 1930, which lead to the loss of hard earned money of several investors. Further the loss contributed to the impact that the new banks did not actually started issues of loans. All this contributed to the minimization of the spending power of the average citizen.
(iii) Stock market collapse, bank failures resulted in reduction in the purchase power of the consumers. Consumers are now not able to spend for their purchases and already taken items taken on instalments were taken back by the companies. Inventory back accumulation, loss of jobs in the companies, increase in unemployment all contributed to the failure in the purchasing power.
(iv) The failure of trade between American and foreign nations like Europe due to high tariff rates imposed created a situation of loss of trade between these two countries.
(v) Also the dust bowl draught formed in the Mississippi area created serious impacts on the farmers, they just sold out their farms to pay back the debts and remained helpless to survive(Temin,2016).
The devastation of the US economy was like never before due to the Great Depression. Almost one third of all the banks in the country got serious effected the total unemployment rate in the country rose to about 25%. The housing prices gone by b y 67%,. International trade in the country got impacted by about 65%, deflation moved to about 10%
Hoover Vs FDR Approach For Resolving The Great Depression
Hoover has undertaken a more handoff approach and he believed that the stock market crash and the implications will be just recovered by doing nothing. People if they follow the similar approach like by remaining normal, he believed things will be recovered. He did not consider much about the failure of the banks and the shoot up of the unemployment rate. However his approach does not yield any constructive implications for recovery. However by 1933, as FDR taken up his office, he created and implemented a range of activities for improving the situation in the country. He devised a range of strategies for economy improvements. Floated a large number of public works for proving temporary employments, Created public works for cleaning the public parks as well. Created short terms employment offers like painting post office murals, created short term works like public land cleaning, Tennasse valley utilities usage by the broke farmers is also part of his strategy, Created bank holidays to avoid investors taken out the money invested in the banks. All these efforts proved to be helpful for the country and maintained their solidarity and effectiveness in keeping the economy of the country concrete, till the country entered into the World War II crisis. To comprehend, it is quite obvious that FDR has taken up concrete and effective measures to protect the economy when compared with Hoover in the context of the Great Depression(Newton,2017).