The Great Depression

22 Pages 5420 Words

roduction of goods and services fell relentlessly, even though gradually; the stock market continued its decline; farm prices collapsed; and many banks, squeezed by the inability of borrowers to repay loans, approached the brink of failure. (Himmelberg, 8) American exports, moreover, declined sharply as depressed conditions appeared in Europe soon after the American crash in late 1929. (Himmelberg, 8) As the depression spread throughout the world, European markets for American goods fell off, creating even more unemployment in the U.S. The new Smoot-Hawley tariff, more protective than the previous one, passed by the Republican-dominated Congress in 1930, was criticized at the time as responsible for the fall off in American exports, and this being a key factor in worsening the depression in America, because it provoked the European governments to raise their own tariffs in retaliation. (Himmelberg, 8) As modern economic historians have pointed out , exports fell off only proportionately to the decline of the European economies and appear to have been declining simply because of falling European buying power rather than because of retaliatory tariffs. (Himmelberg, 8) Regardless, the decline of the European economies aggravated the depression in America, because it narrowed the market for American exports and put pressure on the American financial system. (Himmelberg, 8)
During the last months of 1930, two things occurred that created dire foreboding about the economic future. One was a natural disaster, a drought in the south-central states, especially in Arkansas, which brought suffering to an already greatly afflicted agricultural region. (Himmelberg, 8) It was the beginning of a dry period that extended over the next several years throughout Oklahoma, Kansas, and the other states of the Great Plains, creating conditions that made the region into what contemporaries called the “Dust Bowl.” (Himmelberg, 8) The other occurr...