great depression

One of the biggest economic disasters ever was the Great Depression. It began on "Black Thursday" a day that sent millions to the streets to live. The Great Depression was caused by many reasons; the three main ones were foreign politics, government policy, and maldistribution of wealth that the availability of credit made worse.
Foreign politics was a big factor in the cause of the Great Depression. During the 1920's America was very prosperous because it sold over 10% of its goods to the European exports without buying any imports. Europe was borrowing money from United States so they could buy our goods. However, when World War I struck, European nations were taking all of the lent United States money and they were spending it on resources for the war. They purchased weapons, ammunition, and food. One encyclopedia even gives reference to the vulnerability of the banking system, "the banking system was not well prepared to absorb the shock of a major recession." (3, Wiki) They were working hard on rebuilding infrastructure and purchasing supplies that they couldn't pay back the United States.
The European nations couldn't afford to pay the United States back and they didn't feel the need to. As one historian, Mr. John D. Hicks summarizes it, the Allies' attitude to the debt toward the United States is like this, "In their view, the war was fought for the common objective, and the victory was essential for the safety of the United States as for their own. The United States had entered the struggle late, and had poured forth no such contribution in lives and losses as the Allies' had made. It had paid in dollars, not in death and destruction, and now it wanted its dollars back." (Hicks, 1) During WWI United States loaned the Allies' $7 billion. By 1920, we lent another $900 million, and in 1928, another $1.25 billion.
By 1929, 10% of the gross national products were…


I'm Sandulf

Would you like to get a custom essay? How about receiving a customized one?

Check it out