Source Entry #2
Jean Caldwell & Timothy G. O’Driscoll, ‘’What Caused The Great Depression’’ Social Education 71(2), pp 70–74 ©2007 National Council for the Social Studies
Jean Caldwell and Timothy G. O’Driscoll, ‘’What Caused The Great Depression’’, provides insightful and informative details about the causes of the Great Depression. The authors delineate depression, also known as ‘’recession’’, occurs when there is not enough demand for goods or services that companies produce. During this time, consumers mitigate purchasing goods from businesses. In consequence, a lot of goods will be unsold and companies will start to cut production, laying off people. As a result people lose their jobs, businesses will have fewer customers, decrease in consumer spending, and many people’s income will decrease. Other causes mentioned by the authors is Feds increasing interest rates in 1930-1931. When interest rates increase, people will be charged a higher interest when they borrow money from banks, mortgage rates will increase, businesses will run out of business due to consumers not spending their money. It is also very vital to consider the Federal Reserve System’s role during the Great Depression. Jean Caldwell and Timothy G. O’Driscoll analysis highlights a critical view of this historical event, stating that, ‘’The Great Depression may have originated in a fall in total demand, but its length and severity resulted primarily from the unwillingness of the federal reserve system and to maintain a large enough money supply’’ The authors is revealing to us that the Great Depression went on for a longer duration time than expected due to the federal reserve’s failure to supply money, which could have shorten the Great Depression as well as recover from it faster.
