In this chapter, we will focus on the significant impacts of the Great Depression. We will explore the causes that led to this prolonged economic downturn, as well as the political and global effects that resulted from the Depression.
The Coming of the Great Depression
The Great Depression was primarily caused by the collapse of the value of shares sold on the New York Stock Exchange. Starting in 1929 and lasting until almost 1932-1933, this collapse led to a significant drop in prices. While the working class did not directly hold shares in the stock market, the decline in industrial jobs due to the stock market crash resulted in many job losses. Additionally, farmers, who had been supplying goods during World War I, began to feel the effects of the Depression earlier than others due to the drop in the value of their goods when the war ended. As a result, life became increasingly difficult for both the working class and farmers.
The Great Crash: October 1929 and the Coming of the Great Depression
The crash of the stock market led to ripple effects around the world. In Japan, people lost their jobs, while in countries like Chile and Germany, industries went bankrupt, causing widespread job losses. In Canada and the US, the crash in the New York stock exchange, along with a continuing farm depression and a decline in industrial production, resulted in national economic paralysis.
During the mid-1920s, Americans began to buy Florida real estate that later became worthless. The prices of stocks continued to rise throughout the 1920s, with some downturns in 1924 and 1928. The rapid increase in stock prices led to widespread speculation, with people borrowing money to buy stocks, a practice known as "buying on margin."
As warnings about an impending market crash were largely ignored, stock prices continued to fall, causing widespread panic among investors. This led to a significant decrease in stock prices and resulted in many investors going bankrupt.
The Nation During the Depression
The Great Depression had a devastating impact on the American economy. Banking, manufacturing, farming, and international trade were all heavily affected, pushing more than half of the American population into poverty. Farm closures and factory shutdowns became commonplace, further contributing to the economic strain of the Depression.
Conclusion
The Great Depression was a period of widespread economic turmoil that not only affected the United States but also had far-reaching global consequences. The collapse of the stock market and the subsequent economic downturn had lasting effects on the world economy and sparked significant changes in political and social spheres.
