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The Great Depression

            The Great Depression of the 1930s was the longest economic disaster of the twentieth century. The Great Depression was a chain reaction affecting most areas of the world. It was caused by the world market's crisis with the production and distribution of goods, the refusal of the U.S. and it's trading partners to cooperate, and the difficult financial situation caused by World War I and the peace settlement following. After World War I and the peace settlement, Europeas a whole was dangerously indebt. Because ot this, the currency rose sky high. Also the demand after the war for consumer and industrial goods drove prices higher than average. In the peace settlement, it was agreed that certain countries would pay other countries war reparations. Obligations to pay back war debts slowed business expansion and international trade. In order to make money, governments then had to raise tariffs in order to pay for importation of resources and goods. All of these factors hurt trade, production and employment greatly. Before all of this, towards the end of the 1920s, the stock market had crashed causing banks to fail. This had a large deal to do with the extreme length and devastation of the Great Depression. Eventually in 1932, the U.S. came to the agreement with indebted countries and most war reparations were forgotten. It was obvious that Germany was not going to be able to make their next payment. Difficulties with the production and distribution of goods complicated the Great Depression. In the 1920s the production of goods exceeded the demand for the products and as a result a vast number of factories were closed, which put many employees without a job. Farming was nearly impossible during this time. As new and better methods of farming were discovered, the price of grain dropped, which led to the drop in farmers' income. This, added with the rise in prices of the resources that the farmers needed in order to produce and distribute their crop, made business very hard.

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