The coming of the Depression - WJECGovernment response
The Wall Street Crash in 1929 plunged the USA into economic depression and led to the Great Depression of the 1930s. What were the main causes of the Depression?
The increase in unemployment meant the government was faced with a vastly increased expenditure on benefits. In 1931, it raised income tax and cut unemployment pay by 10 per cent and introduced the Means Test. These measures reduced the amount of money people had to spend and made the Depression worse.
The Import Duties Act 1932 was designed to protect British industry. Tariffs were meant to help British industries as they would make non-UK goods more expensive, and so ideally people and companies would just buy UK goods instead.
The impact of the act, however, was to reduce the amount of international trade and so it made the Depression worse.