The Great Depression

The Great Depression was a time of massive economic decline. It started in 1929 and lasted until the mid- 1940s. The Great Depression had ruinous effects on both rich and poor countries. It affected South America, Netherlands, U.K. Germany and many more (Great). It originated in the U.S with a major collapse of stock market prices in New York Stock Exchange on October 1929, known as Black Tuesday. Though there were many causes which led to this depression and also many effects. Historians say the great depression turned out to be an economic decline worldwide and is also considered as the most serious depression ever experienced by the Western World because of the very high unemployment rate, drought experienced in farming, major decline in economy and bank failures (Nelson). Unemployment in the U.S.A rose to 25%, which means less spending to lessen the economic situation. It eventually worsened with the unavailability of alternate job sources and also high dependency on primary sector industries like farming, mining and forestry. The effects of this unemployment caused, were much more worsened due to high indebtedness and deflation. Unemployment was recorded the highest in 1933. By this time some 13 to 15 million Americans were unemployed. It caused many families to starve and beg for a day’s meal (Borade). The economic depression of the 1930s was the longest and hardest in the American history because it was followed by the longest and hardest droughts on record. 1934 was recorded extremely dry conditions over almost 80% of the United States. With no rain, farmers couldn't grow any crops. No crops meant that the wind blew bare soil high in the air creating dust storms. School was cancelled because of dust storms Some farmers, in trouble because of the bad economy, were forced to give up and move out of the plains looking for work which made them refugees. New scientific evidence suggests that the drought of the 1930s was the worst in North America in the last 300 years (Ganzel). In the 21st century, the Great Depression is used as an example of how far the world’s economy can decline. There were declines in consumer demand, financial panics (event during which bank depositors attempt to withdraw their deposits), and misguided government policies which caused economic output to fall in the United States. The economic impact of the Great Depression was enormous, including both extreme human suffering and great changes in economic policy. Industrial production in the United States declined by 47 percent and real gross domestic product (GDP) fell by 30 percent. Every industrialized countries experienced decline in wholesale prices of 30 percent and more between 1929 and 1933 (Romer). Lastly,over 9,000 banks failed throughout the 1930s. The bank deposits were uninsured thus as banks failed people lost their savings eventually. The banks which survived were concerned more about their own survival, stopped being as willing to create loans. This highly aggravated the situation leading to less and less expenditures. By 1933 nearly half of the Americas banks failed. (Kelly) There were some major actions that helped end these main problems which were the reduction in debt payments, aid given to the area of Britain by the Special Areas Act and 500 council houses built by local councils which brought money into the economy and many more ( The Depression). Thus, I would conclude this era of the great depression was a restless time full of poverty, unemployment, economic problems, tensions, revolts, crashes, conflicts etc. It was hard time for everyone!