Premium Essay

Great Depression

In: Historical Events

Submitted By towhid123
Words 766
Pages 4
The Great Depression1929

Contents

1.Introduction
2.causes of great depression
3.Consequences of the depression.
4.Conclusion

Introduction

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 about 1929 and lasted until the late 1930s or early 1940s. It was the longest, most widespread, and deepest depression of the 20th century, and is used in the 21stcentury as an example of how far the world's economy can decline. The depression originated in the United States, triggered by the stock market crash of October 29, 1929 (known as Black Tuesday), but quickly spread to almost every country in the world. The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped, and international trade plunged by half to two-thirds. Unemployment in the United States rose to 25% , and in some countries rose as high as 33%. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most. Countries started to recover by the mid-1930s, but in many countries the negative effects of the Great Depression lasted until the start of World War II.

Causes of great depression

1. False Prosperity

-overdependence on mass production, consumer spending, advertising, welfare capitalism, high tariff, "invisible hand"
-automobile was the leading...

Similar Documents

Premium Essay

Great Depression

...analyze the Great Depression, and answer the following questions in a paper: • What were the root causes/events that led to the Great Depression? 10 points The Great Depression was a worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world. Although the Depression originated in the United States, it resulted in drastic declines in output, severe unemployment, and acute deflation in almost every country of the globe. But its social and cultural effects were no less staggering, especially in the United States, where the Great Depression ranks second only to the Civil War as the gravest crisis in American history (Great Depression, 2013). The fundamental cause of the Great Depression in the United States was a decline in spending (sometimes referred to as aggregate demand), which led to a decline in production as manufacturers and merchandisers noticed an unintended rise in inventories. The sources of the contraction in spending in the United States varied over the course of the Depression, but they cumulated into a monumental decline in aggregate demand. The American decline was transmitted to the rest of the world largely through the gold standard. However, a variety of other factors also influenced the downturn in various countries. The most prolonged departure from the normal stability of U.S. long-term growth occurred during the Great......

Words: 504 - Pages: 3

Premium Essay

Great Depression

...The Great Depression The great depression was a dramatic, world wide economic downturn beginning in some countries as early as 1928. The beginning of the great depression in the United States is associated with the stock market crash in October 29, 1929, known as Black Tuesday and the end is associated with the onset of the war economy of World War II, beginning around 1939. The depression had devastating effects in both the industrialized countries and those which exported raw materials. International trade decline, personal incomes, tax revenues, prices and profits. Cities all around the world were hit hard. Construction was really slow and so was farming and rural areas suffered as crop prices fell by 40 to 60 percent. The great depression ended at different times in different countries. The great depression was not a sudden total collapse. The stock markets turn upward in the early 1930’s. Together government and business actually spent more in the first half on 1930 than the previous year. Consumers, many of those whom had suffered severe losses in the stock market the prior year cut back on there expenses by 10 percent. In the 1930, credit was available at low rates. People did not want to add new debt by barrowing. By May 1930, auto sales began to decline to below levels of 1928. Prices in general began to decline. Although wages were held for the moment they began to drop in 1931. Conditions were worse in the farming areas. By late 1930 a steady......

Words: 1016 - Pages: 5

Premium Essay

Great Depression

...Prompt: Causes and Effects of the Great Depression A lack of a resources provides an extra motivation to the individual, when times get harder instead of displaying sorrow one should work harder. Ones economic class can provide an image of ones ability to survive but when everyone is struggling economically it can’t be depicted. When society is having trouble to survive as a group, one develops the mentality that only the fittest can survive. Millions of people were unemployed, the unemployment line was the only hope for some families but regardless of how in need one was not everyone obtained a job. For the people that had a difficult time to make money previous to the depression were devastated afterwards, they were practically crawling to survival. Coming off one of the most joyful eras it seems if people got careless and despite people obtaining stocks and putting their money in bank, their money wasn’t safe. People would once hunt for their resources but in present day, most necessities contain a monetary value but a lot of people don’t recognize how hard it is to obtain money. When regarding the Great Depression it seems as if a timeline is proceeds it, when people find themselves in a predicament they attempt to remember the days when being fired from every job and struggling to eat wasn’t second nature. Previous to the great famine, there was a time when people were able to obtain several appliances and things that weren’t needed but several people were taking......

Words: 1055 - Pages: 5

Premium Essay

The Great Depression

...The Great Depression Thomas Clay Forrest Economics 510 Professor Don Waldron February 6, 2011, 2011 The Great Depression The Great Depression was the deepest, longest and most widespread economic calamity of the twentieth century, and is the most common standard of how far things in the world’s economy can decline. Beginning with the First New Deal, which put into effect a host of relief and recovery measures designed to improve economic conditions and stimulate recovery, myriad other steps were taken to prevent another catastrophe of this magnitude from ever occurring again. Are these measure enough, though, and could the world ever experience another Great Depression? How do the events of the Great Depression era compare to recent economic downturns, including the current deep recession the world is experiencing? This essay will provide answers to these questions and provide an analysis of the causes and events that led to the Great Depression. It will also present the reasons why another Great Depression is unlikely to occur again. Debates vary as to the causes of the Great Depression, with many well-respected economists offering differing opinions to what they believe led to the historic event. British economist John Maynard Keynes felt that the Depression was driven by demand, and in his book the General Theory of Employment Interest and Money, Keynes argued that lower aggregate expenditures in the economy contributed to an......

Words: 1620 - Pages: 7

Premium Essay

Great Depression

...In this essay I will be discussing the impact and significance of the Depression as a barometer of governmental success and failures. I will also explain how the harsh economic times impacted the governments of Europe as well as the maintenance of international peace. In order to support my views I will provide multiple examples to support my views. The Great Depression was a horrific economic depression that impacted countries all over the world in the 20th Century. Some of these effect were long lived and took years to recover. Some of the effects from the Great Depression still happens in today’s society such as rise in unemployment, crime rates and prostitution. As well as the lack of funds for healthcare and public education. The US Great Depression lasted from October 1929 until Franklin D. Roosevelt became President in 1933. The Great Depression disrupted the lives of the Americans because for many years the government and the American people had been on a high for so long and within a blink of an eye the world as so many had grown to know came crashing down. One success which came from the government after the Great Depression was it improved the economic system of the United States. President Roosevelt faced the economic depression head-on once he was elected in office. Within his first 100 days in office, he and his administration created numerous institutions which had been neglected for hundred of years. Alot of the programs that were created were very......

Words: 561 - Pages: 3

Premium Essay

Great Depression

...Great Depression The Great Depression had a tremendous effect on the people of this Dark Age in the United States. Throughout these tough times people faced many hardships such as increases in crime, the stock market crash and the Dust Bowl. These events were all results of the Great Depression and also had huge impacts on people’s lives. Beginning of the Great Depression The Depression began in the year 1929 and was a result of the ending of the First World War. The United States was sending aid to Europe in recovery but this resulted in an over extension of credit and spending in the 1920’s. This over extension was a direct cause that led to the “most dramatic economic event in United States history”. No other depression had such a devastating impact on the United States society. Throughout the twelve years of the Great Depression, one quarter of the work force were unemployed, 5,500 banks closed and 32,000 businesses went bankrupt (“Great Depression”). Stock Market Crash On the infamous day known as Black Tuesday, October 29, 1929 the stock market crashed. The only thing was that no one was thinking anything could go wrong because a little over a month before the market had reached a 10-year high price. From then on the prices slowly decreased causing confusion, apprehension, and uncertainty began to set into all investors big and small (Galbraith 1). A couple of days before Black Tuesday a day known as Black Thursday was when people really started to notice...

Words: 1167 - Pages: 5

Free Essay

Great Depression

...The Great Depression The Great Depression was a tragedy for the whole world, but it mostly damaged specifically one country, which had the best economic system in the world at that time - United States of America. The Great Depression was an economic collapse from 1930s to 1940s. This economic disaster was brought to life because of a huge amount of problems. There even were different types of problems, such as social, political, economic, or military problems. All together, they created this economic collapse. The official start of the Great Depression was originated in United States, during the day of October 29, 1929, referring to the article in New York Times. During that day, which was called Black Tuesday, a big economic problem appeared - the stock market crash. A huge amount of people lost a lot of their money just in one day. Prices on stock market fell down very quickly and people did not even get the money that they invested, they lost even more than half they invested. Prices kept falling - people kept losing their money. Secondly, with this crash, the banking system collapsed too. "The banking structure was inherently weak", wrote John Kenneth Galbraith in The Great Crash, which actually was one of the causes of the collapse. This situation appeared because people could not pay their money for using credit system, and so banks were 'destroyed' - "The weak destroyed not only the other weak, but weakened the strong...", says John Kenneth Galbraith. With these......

Words: 593 - Pages: 3

Free Essay

Great Depression

...In 1919-1920, there was effective and excessive growth because of the large purchases were made to put in place the goods consumed during the First World War. These purchases were liquidate stocks, has led to higher prices in the US and Europe. This was a demand driven growth which was supported by bank lending and speculation. This growth continued until 1928. Between 1924-1929 America became the net creditor position in the world with export surplus gained. In the meantime, with the new industries began to develop such as electrically operated machines, the cars. On the other hand, the excessive demand in emerging industries was causing the stock market to be speculative.Economic indicators other than the stock market in the 1920s were quite well. Production and employment rate was high. Wages did not rise too much and prices were stable. But many people were still extremely poor, where the rest of majority wascomfortable and wealthier than ever. Every American desire to be rich in short way has had begun to heavily invest in shares in the stock market. Government remains the gold standard in order to encourage the access of gold and deflationary policies were watching. As a result of these policies, prices starts to fall and economic activity began to decline. The rich was very rich and the poor was very poor and there is nearly no middle class. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the USA and......

Words: 623 - Pages: 3

Premium Essay

The Great Depression

...Why market forces failed to create its equilibrium in the great depression of 1929? Mainstream economic thought that the economy existed in a state of equilibrium meaning that the economy naturally consumes whatever it produces because the needs of consumers are always greater than the capacity of the economy to satisfy those needs. But Keynes's theory was significantly overturned the mainstream thought of the time and brought about a greater awareness that problems such as unemployment are not a product of laziness, but the result of a structural inadequacy in the economic system. He argued that because there was no guarantee that the goods that individuals produce would be met with demand, unemployment was a natural consequence. He saw the economy as unable to maintain itself at full employment and believed that it was necessary for the government to step in and put under-utilized savings to work through government spending. Keynes argued that the solution to the Great Depression was to stimulate the economy through two approaches: 1. A reduction in interest rates s(monetary policy), and 2. Government investment in infrastructure (fiscal policy). There is a merit in government spending can help create market employment. Fiscal policies such as government spending can help achieve full employment pendngcan help achieve full employment by increasing aggregate demand. Since Laborers/unions are unwilling to accept lower wages during a period of demand deficiency and......

Words: 701 - Pages: 3

Premium Essay

Great Depression

...History Research Paper | The effects of the Great Depression were huge across the world. Not only did it lead to the New Deal in America but more significantly, it was a direct cause of the rise of extremism in Germany leading to World War II. | Charles Sodman1/30/2014 | Introduction According to Christine Romer the Great Depression commenced in the year 1929 till the year 1939, the longest in the history of the world. The origin of the Great Depression from the year 1929 to the year 1939 has been the worry of many researchers. However, the root cause of this unfortunate happening was hard to crack. Therefore, the search was abandoned and many speculations and assumptions were made as to what really caused the Depression. (Romer) Till present, the cause of this sad event has not been found. More so, the effects of the Great Depression lead to many broke and unemployed individuals who could hardly feed themselves daily. Additionally, goods and services were priced at 10 times less their original price. (Romer) As a result, there was a practice of extremities in Germany by individuals who took advantage of the situation for personal gain leading to the World War II. (de Bromhead, Eichengreen and O’Rourke) Countries were greatly affected as the Great Depression brought about alterations in macroeconomic policies, significant changes in economic institutions, and economic theories. (Romer) The effects of the Great Depression Crash in stock prices Stock prices......

Words: 1579 - Pages: 7

Premium Essay

The Great Depression

...The Great Depression In the beginning of the book “The Making of Economic Society,” Heilbronner (2012) explains that the market system is “a complex mode of organizing society” (p. 12). But, it is until chapter six that the author examines how complex this mode can be. In this chapter some of the limitations of the market system and the relation to the Great Depression are noted. The Great Depression was not caused by one single event. It was caused by unstable credit systems, a deterioration of farm purchasing power, technological unemployment, and a bad distribution of income. But, most interesting is the significant impact of the Great Depression, which I believe is that it changed the relationship between government and economics and politics. I believe that there were a series of events that triggered the Great Depression. A shift in society’s attitudes perhaps was an invisible trigger. During the boom of the stock market many everyday people were enticed to use all their savings to invest in the stock market. Society’s attitudes changed to a “get-rich-quick” attitude. In the meantime, according to the author there were signs of a weak economy. For example, unemployment was rising, residential construction falling, less investment in saving accounts, and wages had decreased. Perhaps then, when these facts were finally visible that is when the Great Crash was triggered. I find it interesting though that the author notes that “no one knows exactly what final event......

Words: 604 - Pages: 3

Premium Essay

Great Depression

...Great Depression HIS/125 10-20-2011 Great Depression Many people credit the stock market crash of 1929 cause the Great Depression it was only one of many reasons that brought on the Great Depression in America. The Great Depression lasted from 1930 until the US entered World War II, and with the work that World War II brought to industry America was able to climb out of the Great Depression. The damage that the great stark market crash due to the economy is unparalleled in American history. It not only hurt Americans at home but also abroad, Europeans did not trust America anymore due to this crop prices abroad sunk to new lows. Farm income in America dropped by more than half (Davidson, 2005). Bank failures also spread from the rural banks to the cities, depositors rushed to withdraw their cash, this sent the American economy in a downward plunge. The automobile and construction industries also began to lag. But overall the causes for the Great Depression started earlier, that when the great crash happened. In the year 1928 to 1929 consumer spending and services dropped to 1.5%. (Davidson, 2005). The booming economy has hurt itself instead of paying workers higher wages businesses use their profits to expand their factories, this in turn led to, workers who did not have enough money to buy the products that they were making at efficiently and lower costs (Davidson, 2005). Workers started borrowing or using credit to pay. Consumer......

Words: 447 - Pages: 2

Premium Essay

Great Depression

...The Great Depression In economics, depression is referred to a period of crisis in industry, commerce and trade. It is marked by the falling prices along with low output and higher level of unemployment. The great depression of 1929 is the most relevant example of the economic crisis, for which the level of severity was unprecedented. Though, originated in United States, the Great Depression spread across the world and engulfed other countries as well. It is termed as the gravest and longest crisis that affected the western industrialized world. It also had some impact on the other countries such as Japan, Brazil and Argentina. It is said that US economy was already in upheavals, six months before the stock market crashed on 29 0ctober, 1929. With the crash of New York stock exchange market, the consumer demand of durable goods and investment fell significantly. The crash of Stock Exchange led to the bankruptcy of many banks. Depositors emptied their bank accounts in panic and this led to the insolvency of many banks across United States. Another factor which coincided with the depression was the drought which occurred in Mississippi valley in 1930 and it worsened the situation for the farmers who were already suffering from the depression. To recover from great depression, newly elected US president Franklin D. Roosevelt established a program in 1932 which became known as the New Deal. The New Deal included number of policies which aimed at improving the......

Words: 314 - Pages: 2

Premium Essay

Great Depression

...learned something about the great depression and the effects it had on the United States. There are a list of issues the created the great depression, but have we actually thought about it, and tried to understand it before? In the 1920’s the American economy was going strong, for the most part, and the vast majority of Americans had witnessed economic growth, however, stock prices fell, more and more issues arose, and then came the great depression which created uneven distribution of wealth and an irrational behavior from the stock market. In the film, Matewan, it brought up how things were tough in response to effort by the miners to organize labor union, and they were receiving huge cuts in their pay, and some of the coal mine workers were being replaced, which I would assume were being paid substantially less than the original coal miners were. The new workers were African American from Alabama, but they did not make it far because the coal miners were on the attack. I would imagine this was not the only issue America was facing before or during the great depression. The crash of the stock market not only affected the poor, it affected the rich as well, but like I stated before, one of the biggest issues was the gap between the rich working class people and how it was enlarged. Also, production costs fell quickly and wages rose slowly and prices remained steady. Obviously, like most problems in America, the government contributed to the depression as well. The federal......

Words: 1415 - Pages: 6

Premium Essay

Great Depression

...The Great Depression was a major disaster for economics worldwide. It lasted from 1929-1939 and is the longest economic downturn recorded in history. In the United States, millions of investors were wiped out and Wall Street was in shambles when the stock market crashed in October of 1929, causing the unemployment rate to raise and the industrial output to severely drop. The Great Depression reached its worse point by 1933, causing twelve to fifteen million people to fall under unemployment and almost fifty percent of the country’s banks to spiral into failure. Though Franklin D. Roosevelt set some reform measures into place, his ideas did not fully fix the economy’s drop, and the Great Depression did not start to fully get back on track until 1939 when World War II caused American industry to skyrocket. During the Great Depression, unemployment hit the highest rate of history. In 1929, the stock market crashed, causing many investors to go down with it and sending approximately twelve to fifteen million people to become laid off and/or unemployed. On October 24th, 1929, the stock market finally dropped to its lowest point leading roughly thirteen million investors to sell their shares in stocks before they became completely bankrupt. On October 29th of the same year, another roughly sixteen million investors traded their stocks, sending the stock market into a panic wave. Millions of shares ended up completely worthless and the investors that did not trade out in time or......

Words: 543 - Pages: 3