The result was the opposite. Imports increased and the government was forced to borrow more and more. This Problem started to cause another BOP crisis. This shows us how Macmillan tried to keep control of the economy but ended up causing turmoil in the economy even though it was a little bit. General Economic Decline At one level the Tories had been successful in their management of the economy.
US industries were producing more goods then it could sell, this is bad because if the people are not buying goods it becomes useless and people needed to but them so that the economy grows but instead people didn’t buy because they had them already, therefore it was wasteful as no one wanted to buy, so it decreased the wealth of the economy. The most important reasons why the Wall Street crash happened were; the speculation ‘on the margin’, this was important because buying shares with a banks money and not being able to repay
This would have placated political opposition, reduced the number of strikes and strengthened the security of the monarchy. Thus, Tsarism had a good chance of survival if the industrial boom continued. The war, however, checked any possibility of this as the economy heaved and inflation rose. Living standards deteriorated as food and fuel, used up by the army, came into short supply. Add to this the grief incurred, especially among the conscripted peasant population, by 4 million military deaths in the first year of war, and no wonder opposition to the Tsar climaxed.
There was a combination of domestic and worldwide conditions that led to the Great Depression. Many have believed that the crash of the stock market on October 29th, is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to recover some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.
The collapse of stock market happened because it had a weak foundation. In fact, it was dependent on borrowed money; banks would lend money to the population to buy shares in the market without making sure the borrowers were able to pay back. Moreover, facing the crisis over nine thousand banks were obliged to close, for they invested their client's savings in the stock market. Going through rough time financially, Americans are drastically forced to reduce their spending which lowered the amount of production; therefore, employers slashed the numbers of employees that caused the unemployment rate to rose from 4.2 in 1928 to 8.7 in 1930 and to 23.6 in 1932. In the middle of the crisis, several social classes experienced a harsh time.
By the 1780’s the government was nearly bankrupt, and half of government income was going on paying debts. One of the reasons to explain why there was a money deficit was taxes. The huge anomalies in the taxation system, whereby the richest were not taxed, caused there to not be enough income for the government to do its job properly. The taxes did increase under the rule of Louis XVI; however this only affected the poor even worse. Calonne, the finance minister between 1783 and 1787, introduced a series of reforms to improve the economy, in which the king stood by, but the notables
This essay will explain 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 increase 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. Rich people already had the goods, and the poor couldn’t afford them, meaning the market suffered.
They were also influenced by the fear of Europe flooding American markets with cheap goods after the war. Presidents Harding and Coolidge, granted with authority to reduce or increase duties, were always sympathetic towards the big industries, thus much more prone to increasing tariffs than decreasing them. Congress soon passed the Fordney-McCumber Tariff Law, which raised the tariff from 27% to 38.5%. However, this presented a problem for Europe since they needed to sell goods to the U.S. in order to get the money to pay back is debts, and when it could not sell, it could not repay. Later on President Hoover passed the Hawley-Smoot Tariff of 1930 which raised duty on non-free goods to nearly 60%.
The economy of the Weimar Republic had been damaged due to hyperinflation in 1923. There was a large number of resentment due to businesses and the government paying off their war debts with worthless marks. The hyperinflation also caused the government to lose the support of the middle class people as all of their savings were gone. The Dawes Plan which Germany did depend on was to help them rebuild the country was good as there was a rise in the economy but it didn’t help as it was on a short term loans
The share prices were lower, which caused the crash of the stock market. The collapse of the stock market was thought to be the main cause of the great depression, but many economists do not think so. Great Depression very quickly was spread all over the world. The Great Depression was a period of high rates unemployment, bankrupting banks, lowering prices, and increasing the uncertainty to American nation. Moreover, it brought big changes in U.S politic, society and culture.