Great Depression Myths

Decent Essays
Great Myths of the Great Depression Throughout history governments that were laissez-faire has more economic prosperity. One cause of the Great Depression was international financial instability. After World War 1 there was a global economic depression. Britain, France, and Germany were in major debt to the U.S. Germany had to pay Britain and France reparations for the destruction they caused there. Germany could not make these payments. To help, the Dawes Committee came up with the Dawes plan. It was an agreement between Great Britain, France, Germany, and the U.S. In this plan Germany would pay less in reparations. In return, the U.S. would loan Germany money to help them pay their reparations. Britain and France agreed to use some of the…show more content…
President Hoover passed the Hawley-Smoot Tariff Act. This made taxes on imported goods very high. They thought that by doing this it would make Americans buy in the U.S. which would help with unemployment. However, if outsiders could not sell their products in the U.S., then they couldn’t make enough money to buy in the U.S. either. This tariff caused farmers to lose ⅓ of their markets. Another example is when President Franklin Roosevelt passed the Agricultural Adjustment Act (AAA). This act paid farmers to stop farming. The AAA helped farmers by reducing supply to increase prices but it hurt millions of people who were paying these prices and people had to deal with less food. A third example is the National Industrial Recovery Act (NIRA). This act created the National Recovery Administration (NRA). Its purpose was to regulate businesses, wages, unions, and prices. The rules were very complex. They told businesses how to operate. The government talked with large firms to help write the rules. These rules generally favored the large firms. The problem was this act created a monopoly, one company dominates the entire industry, which led to even more unemployment. These are three of the many acts that attempted to recover the economy but in the end it made things
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