Why Did The American Economy Fall Into a Depressio

Why did the American economy fall into a economic crisis by the 1930s?

By the 1930s, around 50% of Americans lived on or infra the poverty line. Boom had turned to hold out and the country had entered a depression. But what caused this? This essay will explicate the several factors that led to the American Great Depression and their significance.

Firstly, overproduction featured in the economical downfall of the country. Due to the advances In technology and the assembly line/mass production an improver in supply followed of consumer goods such as cars, vacuum cleaners and fridges. However the supply started to outstrip the demand and the market became saturated. replete people already had the goods, and the poor couldnt generate them, nitty-gritty the market suffered. As a result of this factories made cuts in staff and output, thus leading to even greater fall in the market as people had less to spend.

likewise the wealth in the country was very unevenly distributed. As mentioned previously, around 50% of the population were on or below the poverty line of $2000 a year. The worst affected groups were spring upers, farm labourers, workers in old industries, Black Americans and new immigrants. Also in many industries wages were low because the bosses opposed trade unions and resisted increases in pay to maximise profits.



This added to the unequal distribution of wealth which in the long run decreased demand for products and so was and then a long term cause of the depression.

The next factor, duty policies, led to the rise of the country however they were exploited and in the end led to the economic downfall of America. Tarriffs such as the Fordney Mcumber responsibility restricted imports on foreign goods to protect domestic industries from competition. This benefited Us industry at first, however it caused long term problems. unknown countries could not sell to America and foreign countries couldt afford American goods, thus leading to the downfall of the economy.

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