What was the cause of the Great Depression, other than the stock market crash?

Answer 1

Taft caused it with his trickle down administration policies. He allowed the stock market to inflate just like Bush is, and the banks couldn't cover the money owed when people made a run on the banks. They were common criminals. Roosevelt created the FDIC to protect the American citizens savings from thieves after that. FDR was a Democrat too, he was in office 4 terms, voted by the American people and pulled America out of the depression.

Answer 2

Most will say (wrongly) that it was caused by the "boom-bust cycle" of the economy, but that isn't necessarily a feature of a market economy. It was really set in motion by the central bank. In this case, it was our Federal Reserve System, a distinctly non-market institution.

What happened was that, following the stock market crash, President Hoover asked businesses to freeze wages. Since wages are a cost of doing business, by demanding high watges at a time when prices were rapidly declining, President Hoover made it more difficult for business to hire people. The result: Mass Unemployment.

President Hoover also established the Federal Farm Board (FFB) to subsidize farmers by paying them to keep crops of the market, keeping the cost of food high. He thought this would protect them, but the tariff inflated the cost of wheat so much that most of the world went to Canada and Argentina for their source of wheat, and in doing so put more farmers out of work.

Additionally, the Smoot-Hawley Tariff raised tariffs an average of more than 59 percent on 25,000 items. Exports were hit hardest. The result was a loss of business. When coupled with inflated wages in a receeding enconomy, it added to the spiral downward.

But that's not all. Hoover also pushed for Income Tax increases, with surtaxes increased on the highest incomes from 25percent to 63 percent. This meant that in the midst of a Depression, when private investment was desperately needed, it was made much less attractive.

In the end, the buisinesses that Hoover hoped to save either went bankrupt or were burdened throughout the 1930's by a crushing load of debt. To his credit, Hoover did hesitate to provide massive, direct Federal relief. He preferred to insetad rely on voluntary organizations and to make loans to the states instead. Which may have gotten him the erroneous reputation he still has that he "did nothing". Quite to the contrary, he's dabbling and meddling made a recession into a depression.

Answer 3

Probably the plan for a war. I believe that it was the total control of the world bankers of the world currencies that caused the crash. Interesting to note that after the "crash" there was so much money available for all the countries involved in WW II to finance all their war machines, almost as if it were planned. Also the crash would coerce people to fight a war. since many people lied about their age to fight in the war to help out their parents that became poor as a result of the crash. After the war all these countries had paid back the loans and interest to the banks for decades. The banks profited big time.

Answer 4

The freeing of capital from government use to commercial use following World War I caused commodity prices to inflate. In 1920, Ben Strong of the US Federal Reserve Bank of New York raised interest rates sharply to prevent inflation. This caused a recession and the stock market to fall. Once hard assets like commodities and real estate were no longer rising in price, money began to pour into stocks and bonds.

Answer 5

the stock market crash was nothing more than a panic. happens all the time. happened with reagan and clinton, but no depression. the depression was caused by the smoot hawley act, and was continued through 9 years of roosevelt, by stupid actions by the federal reserve. they continued to contract the money supply, making it impossible to grow the economy. the idiot roosevelt never got us out of it, and if not for the industrialisation of WWII, the stupid democrats would have kept us in the depression until truman got booted from office

Answer 6

The refusal of the Fed Reserves to release more $$ into the economy causing bank "runs" (see 'A Wonderful Life') causing bank failures and massive foreclosures. Also massive CREDIT given to stock market investors to buy stocks who lost EVERYTHING when the market CRASHED.

That's the main reason we have the FDIC now...(Fed Deposit Insurance Co.) You can get back 10k if your bank fails.

Answer 7

Actually, a very big cause was Prohibition.
Millions of people worked in the Brewing Industry, trucked it, warehoused it, grew grain for it, served it, made bottles for it,
did the actual brewing, printed the lables and all the supporting industries.
BANG !! OVER NIGHT !! Millions of people out of work and the economy could not recover.

One of the Great Liberal F-ck ups of all time.
Whole counties in Kentucky were economicaly destroyed alone.

Answer 8

quite simply a tight money supply,that started the death spiral of no credit =no spending=no hiring=no jobs =no spending. Now see what ended it ,sombody(in this case government) spent billions of dollars in BORROWED MONEY .see roosevelts NEW DEAL was a feel good program at best ,at worst it was an unconstitutional prower grab - WW2 baby thats what ended the depression ,the greatest get rich quick scheme EVER!! in 4 years we went from the OUTHOUSE to the BIG HOUSE!

Answer 9

a lot of different things like the government wasn't very involved with the people and that's why the prersident at the time(i think it was roosevelt) starting making a bunch of new government programs, and also the banks were giving out money that wasn't backed up by the gold, but it is today because of that

Answer 10

The have nots out numbered the haves, work was scarce, the drought in america wiped out food crops, our government was unprepared for such disasters.