Perhaps the worst economic downturn in the history of the United States occurred from 1930-1939. The Great Depression led to domestic and international crises effecting the poor and wealthy alike. Many financial experts today continue to debate the cause of The Depression, although most agree that several events led to the economic decline. The famous stock market crash on October 29, 1929 is just one of many causes economists believe led to The Great Depression. Known also as Black Tuesday, October 29th left stockholders shattered with recorded losses reaching $40 billion dollars (Kelly, n.d.).
Germanys list of problems at this time was only growing. Losing WW1 caused many problems in itself as one might expect, never mind the Treaty of Versailles that was to follow. The most prominent socio-economic effects were most naturally the casualties, 2 million Germans were killed and a further 6 million were injured, also the increasing number of civilian deaths due to hypothermia and starvation. The reason these deaths increased, was due to food and fuel shortages caused by the cold winter of 1916-17. In these winter months there were signs of the country’s morale and unity breaking, it was not helped when Germany was hit with an influenza epidemic, wiping out 20-40 million, the resistance to the disease was lowered due to decline in living conditions.
History HL Research Essay Discuss and evaluate the effects of the Great Depression on France The Great Depression is a name for a worldwide economic depression lasting from 1929 to the late 1930s or 1940s, depending on individual countries. Depression in economical terms is defined as ‘a severe downturn in economic activity. These are considerably worse than recessions.’. It is thought that it started with the crash of the stock market in USA on ‘Black Tuesday’ 29th October 1929, but some economics and historians debate whether this is a start or just a symptom of the Great Depression. Other major causes and symptoms of such a severe economic crisis were the quantities of gold stockpiled by particular countries, large number of banks failing during the 1930s, the reduction in money spent by people and huge international trade barriers placed by governments.
The Great Depression was triggered by a sudden, total collapse in the stock market. This day, October 29, 1929, came to be known as Black Tuesday. There were many probable causes of this devastating time, such as massive bank failures, and the stock market crash. Others, such as economists, such as Peter Termin and Barry Eichengreen, believe the blame lies on Britain’s decision to return to the Gold Standard. According to many sources, recession cycles are a normal phenomenon.
The Nazi’s were not in a position to manage an electoral support. Then at the perfect time for the Nazi’s, the Wall Street Crash came in 1929. This compounded existing weaknesses in the economy. The loans and investments dried up and this was quickly followed by demands for the repayment of those short-term loans. The crisis also caused a decline in exports and productions as the demand for exports collapsed and the world trade slumped for Germany.
The Causes of the Great Depression The Great Depression was an economic downfall that to this day is the worst economic downfall in U.S history. The depression started in the United States. People all over the world were affected by it, especially in Europe, Germany, Great Britain and other industrialized areas of the world. Mainly because America was a big creditor to those countries after World War I. The Great Depression lasted in America for at least ten years, but it took twenty-seven years to get the economy back above depression levels.
Before we can explore causes, we first need to define what we mean by The Great Depression The Great Depression was a global economic crisis that may have been triggered by political decisions (war reparations post-World War I), protectionism (Congressional tariffs on European goods) or by speculation .Worldwide, there was increased unemployment, decreased government revenue, a drop in international trade. Its kickoff in the U.S. economy was “Black Thursday," October 24, 1929. That's when 12.9 million shares of stock were sold in one day. It was triple the usual amount. At the height of the Great Depression in 1933, more than a quarter of the US labor force was unemployed.
The family is constantly migrating in search for survival while the job market remains very limited. Charles Hearn the author of “The American Dream in the Great Depression” argues that depression years had classified “little men” as heroes and put emphasis on security over advancement and spiritual values over material values. Moreover, he makes an important observation on the change in the American Dream in the history of United States. The stock market crash of 1929 impacted American families financially as well as psychologically. The rising unemployment and lack of adequate food and shelter were nonetheless circumstances inevitable by majority of Americans.
One of the reasons why the economy weakened after the Second World War was because of the resources Britain needed for warfare. Three industries which were the “engines of power”, cotton, coal and engineering, were declining (Darwin, 1988: 60). Without the means to modernize her industrial technologies Britain’s influence in the world declined. Furthermore, many factories, houses and shipping ports were destroyed during the bombing. According to Darwin (1988: 65), twenty five percent of the national wealth was needed for war supplies, restoration of industries and reconstruction of the buildings.
We inevitably saw the classical model challenged. John Maynard Keynes ideas caused a shift which saw the Keynesian model come into place in the late 1930s. For many economists, it was the Great Depression that helped the confirmation of Keynes’s ideas. For example, a sudden decrease in aggregate demand was thought that caused the macroeconomic problems. This caused a ‘Recessionary gap’ where a fall in aggregate demand took an economy from above its potential output to below its potential output.