Introduction

The Great Depression continued from 1929 to 1939 and considered as the nastiest financial depression in the United States history. The historians and economists argued on the stock market boom of October twenty-fourth, 1929, as the initiation of the slump (Eichengreen, & Temin, 2000). But the fact was that numerous things triggered the Great Depression (GD), not specifically that single incident. In the United State, the Great Depression damaged the position of Herbert Hoover and headed to the voting of Franklin D. Roosevelt in the year 1932 (Robbins, 2011). Promised to provide the country a New Deal, Roosevelt became the country`s longest-serving leader or president (Robbins, 2011). The communal and cultural impacts of Great depression had no less astounding, particularly in America, where the GD denoted the strictest adversity confronted by American people after the Civil War (Eichengreen, & Temin, 2000). In this particular assessment the causes of Great Depression, three ways that the New Deal solved the problem, how World war 2 helped to the rise of Cold War tensions, and the two different changes due to historical events will be discussed.

Causes Of Great Depression

1. A crash of the stock market (economic policies) –

  Many trusts mistakenly that the crash of stock market happened on Black Tuesday; October twenty-ninth, 1929 is one and the similar with the GD. In point, it was considered one of the main reasons that result in the Great Depression (Kennedy, 2003). Sixty days after the real boom in October, the shareholders had misplaced higher than $40 billion US dollars. Even though the American stock market initiated to recover some of its damages, by the completion of 1930, it just was not sufficient and the US truly moved in what was named the Great Depression (Kennedy, 2003).

2. Failures of Banks –

During the 1930s more than 9,000 banks botched. Bank credits were uninsured and therefore the banks failed individuals simply lost their funds (Calomiris, & Mason, 2003). Remaining banks were insecure of the financial condition and worried about their personal existence, stopped being as eager to generate new loans or credits. This worsened the condition leading to fewer and fewer disbursements (Calomiris, & Mason, 2003).

3. The decrease in Buying Through the Board –

Due to the stock market smash and the doubts of further financial woes, people from every class stopped buying items. This now led to a lessening in the number of items manufactured and thus a decline in the staff (Calomiris, & Mason, 2003). As individuals lost their employment, they were incapable to hold onto paying for objects they had bought with installment policies and their things were repossessed. The joblessness rate increased above 25 percent which intended; of course, even less expenditure to assist alleviate the financial situation (Carlson, & Mitchener, 2009).

4. Economic Policy of America with Europe –

As businesses initiated weakening, the government formed the Smoot-Hawley Tariff in the year of 1930 to defend American corporations. This charged a great tax for importations thereby results in less trade among America and foreign nations along with certain economic reprisal (Almunia, Benetrix, Eichengreen, O’Rourke, & Rua, 2010).

5. Drought-related conditions –

Although drought was not a straight initiator of the GD, but affect the economy indirectly. The drought that happened in the various part of Mississippi Valley in 1930 was of such extents that numerous could not even wage their dues or other credits and had to vend their smallholdings for no return to themselves. The region was named "The Dust Bowl” (Fishback, Horrace, & Kantor, 2006).

Three Ways By Which New Deal Solved Great Depression

WPA and CCA        

FDR generated the Civilian Conservation Corps and the Works Progress Administration to offer occupations for lots of jobless American people in order to kick-start the economy once more (Fishback, Horrace, & Kantor, 2006). The WPA concentrated on developments: Throughout its time, labors built 651,087 miles of good roads, highways, and streets; and constructed, refurbished or rebuild around124, 031 bridges, nearly 125,110 communal buildings, 8,192 public parks, and close to 853 landing grounds (Mitchell, 2017).