Great Depression

The Great Depression

The Great Depression was a worldwide economic downturn. It began in most countries in 1929 and ended at different times in the 1930's up until the start of the war in 1939. The Great depression was the largest and most severe economic depression the world has seen and especially for the industrialized western world. It is still used up to this day as a benchmark to demonstrate how the world's economy can collapse and fall with a domino effect. It is believed that the Great Depression started in the United States when the stock market crashed on October 29, 1929, known as "Black Tuesday". The Wall Street Crash was the most devastating stock market crash in the history of the U.S., stocks continued to drop until 1932 when they dropped to only 20% of their value in of 1929. The Great Depression ended in the beginning of 1939 with the onset of World War 2.

Word War I had taken its toll on Europe and as a result the U.S. came out of the war as financer of the war torn European countries, so when the American Economy slumped and the flow of investments into Europe slowed, Europe started feeling the effects of the Depression. As the exports started to slow down, many countries tried to protect their industries by imposing tariffs or raising existing ones which greatly reduced international trade. In the U.S. and Germany unemployment was as high as 25% with many other countries in the same range. Black Tuesday set the stage for the Depression but the causes were there. After the first World War Europe was in heavy war debt, especially the countries that lost like Germany who were made to pay reparations, they were borrowing large amounts of money from U.S. banks. These American banks were heavily invested in the American stock markets, and during the 1920 were enjoying their profits as stocks kept getting higher and higher. Its very simple, banks and the general public would buy stocks that were doing well and as more people bought the stocks... [continues]

Read full essay