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The Great Depression
Let’s take a look at what occurred during this dark time:
The Great Depression was an economic fall that occurred in North America, Europe, as well as in other industrialized areas of the world that started in 1929 and lasted until around 1939. This was known to be the longest and most brutal depression that the industrialized Western world had ever gone through. Even though the economy of the United States had gone into depression six months before, the Great Depression may be said to have started with a disastrous cave in of the stock market prices on the New York Stock Exchange in October 1929. For the period of the next three years the stock prices in the United States kept on falling, until by the end of 1932 they had fallen to only around twenty percent of their value in 1929. In addition to destroying many thousands of individual investors, this steep decline in the value of assets significantly strained banks as well as many other financial institutions, for the most part the ones holding stocks in their portfolios. A lot of banks were as a result forced into bankruptcy; by 1933, 11,000 of the United States' 25,000 banks had failed. The breakdown of so many banks, along with a common and nationwide loss of assurance in the economy, brought about a lot of reduced amounts of spending and demand and consequently of production, which as a result aggravated the descending spiral. The outcome was significantly falling output and drastically mounting unemployment. By 1932, the manufacturing output in the United States had gone down to fifty four percent of the level it had had in 1929, and unemployment had gone up to between twelve and fifteen million workers, which was approximately a twenty to thirty percent of the work force.
The Great Depression started in the United States however very rapidly turned into a worldwide economic crash owing to the special and intimate associations that had been forged between the United States and European economies after World War I. The United States had come out from the war as the main creditor and supporter of postwar Europe, whose national economies had been to a great extent destabilized by the war itself, due to war debts, and, in the case of Germany as well as other overcome nations, by the need to pay war compensation etc. Therefore after the American economy fell and the flow of American investment credits to Europe ended, prosperity was apt to fall down there as well. The Depression stroke hardest the nations that were most deeply indebted to the United States, such as in the case of Germany and Great Britain. In Germany, unemployment rose very quickly and started at the ending of 1929, and by the beginning of 1932 it had reached six million workers, which was equal to twenty five percent of the work force. Britain was not as harshly affected however its industrial and export sectors continued to be seriously depressed until World War II. A lot of other countries had also been affected by the slump when 1931 came around.