Great Depression

The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries, it started in the late 1920s and lasted until the late 1930s. It was the longest, deepest, and most widespread depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world’s economy can decline.

The Great Depression originated in the United States, starting with the stock market crash of October 1929 and rapidly spreading to the world. From there, it quickly spread to every country in the world and affected almost every area of daily life. Many economists believe that the monetary policies of the Federal Reserve led to the Great Depression. However, some historians have argued that other sources of the decline, such as a decline in spending, an inadequate gold standard, and an international decrease in trade and capital flows, were also important factors.

The Great Depression had catastrophic effects on economies and societies around the world. By 1933, when the Great Depression reached its lowest degree of economic activity, some 15 million Americans were unemployed, and almost half of the country’s banks had failed. The Great Depression began with a stock market crash in the United States, but quickly spread throughout the world, resulting in severe economic hardship for nearly every country. International trade and investment also declined drastically during this time, leading to a downturn in global economic activity and a reduced demand for goods and services.

The impact of the Great Depression varied from country to country, but generally worsened the already-existing economic difficulties. In the United States, the New Deal was enacted, attempting to provide relief to the unemployed and stimulate the economy, while in Europe the existence of multiple currencies and the limited ability of nations to raise tariffs prevented the implementation of similar measures.

During the Great Depression, personal incomes, prices, and profits declined, while international trade plunged by more than 50%. Unemployment rose to a staggering 25%, and in some areas, as much as one-third of all workers were without a job. The severe economic contraction was felt all over the world, but particularly in industrialized economies such as the United States, Germany, and France.

Many people found themselves without work and without the means to support their families. In the United States, many were forced to live in ramshackle Hoovervilles or on the street. Other nations, such as Germany and Austria, saw a resurgence in poverty due to the rapidly declining value of their currencies. Even those nations that remained relatively unaffected by the Great Depression saw significant unrest among the population and labor shortages due to the flight of many workers to richer countries looking for employment.

The impact of the Great Depression was felt for many years after its end in the early 1940s. In the United States, the New Deal, enacted under President Roosevelt, attempted to bring about recovery, but the resulting economic rebound was frayed and lagged far behind the temporal remedy of World War II. Germany, meanwhile, saw a significant reduction in its standard of living due to the near-total destruction of its industrial sector. For those countries that had already been hampered by the installation of tariffs, the Great Depression placed further constraints on their ability to generate economic growth.

The Great Depression undoubtedly set the release of the United States complex economy back by years, leaving a lasting imprint on its economic landscape. The impacts of the Great Depression are impossible to quantify, as it marked a pivotal period of growth and change in global economics. That said, its effects can still be felt today, with the dominating presence of the U.S. economy and its historically unparalleled ability to influence other nations both positively and negatively.

The Great Depression was a severe global economic depression that began in 1929 and lasted until the mid-1930s. The Great Depression stemmed from a number of complex economic disturbances, including economic downturns in the early 19th century, and a major slump that occurred in 1929, when nearly a third of the US banking system collapsed, setting off an international economic catastrophe.

The Great Depression worsened during 1930 and had worldwide effects that continued into the mid-1930s. Major causes of the economic crisis included stock market speculation, overproduction, over-borrowing, unequal distribution of wealth, and a very weak banking system. Many economists point to the Smoot-Hawley Tariff Act of 1930 as a major contributing factor, as it increased tariffs on many imports, causing other countries to lower their tariffs, resulting in a worldwide reduction in international trade.

In the United States, the Stock Market Crash of 1929 and the subsequent bankruptcy of thousands of banks caused a fall in investments and consumption, creating deflation and decreasing industrial production. This in turn caused thousands of businesses to close and millions of people to lose their jobs. People had to live off their savings, which were quickly depleted. With no money to purchase food, people started to starve and poverty spread. It was during this period that soup kitchens and bread lines were established.

The Great Depression hit hardest those who were already vulnerable. African Americans were hit particularly hard during the Great Depression, as they already had difficulty finding employment prior to the depression, and they were often denied jobs and access to credit. Other citizens, such as the elderly and immigrants, were also disproportionately affected.

The Great Depression led to sweeping political and social changes, including the election of Franklin D. Roosevelt to the presidency in 1933, the implementation of numerous new government programs, and the creation of the New Deal. Though the depression eventually ended in the mid-1930s with the implementation of programs like the National Recovery Administration, the Great Depression had lasting effects. It changed the political makeup of the United States and shaped economic policy for decades to come.