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Q: What were the domestic and foreign causes of the Great Depression?
A: There were many causes that led to the Great Depression. Most people think that the stock market crash of 1929 caused the Great Depression. But it was only one of the causes. Bank failures also led to the Great Depression. When banks failed, many had uninsured their funds, so they simply just lost their money. The banks that had survived became more stingy on how many loans the would give out, to protect their interests. After the stock market crashed, many feared that there would be more economic hits. This led to a decrease in spending across the board. People from all different classes stoped purchasing items, leading to less products needing to be made. Many people lost their jobs during this time because of it. The Smoot-Hawley tariff was a foreign cause of the depression. The tariff charged a high tax for imports from foreign countries. Ultimately, the United States lost a lot of business from foreign businesses.
How did President Hoover respond to the economic emergency?
President Hoover basically just put the power back into the peoples hands. He encouraged them to "tighten their belts and work hard"(Henretta. 2016) to help boost the economy. He also expressed that the business community could turn their situation around by themselves, without assistance from the government.
This is what they called the gold standard. It was this mindset that made the Depression get to the depth that it did, and why it lasted so long.
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