The Great Depression

1. The Great Depression By Jeff, Akshay and Travis

2. What is the Great Depression? The Great Depression was an economic slump in North America, Europe, and other industrialized areas of the world that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world.Though the U.S. economy had gone into depression six months earlier, the Great Depression may be said to have begun with a catastrophic collapse of stock-market prices on the New York Stock Exchange in October 1929. During the next three years stock prices in the United States continued to fall, until by late 1932 they had dropped to only about 20 percent of their value in 1929. Besides ruining many thousands of individual investors, this precipitous decline in the value of assets greatly strained banks and other financial institutions, particularly those holding stocks in their portfolios. Many banks were consequently forced into insolvency; by 1933, 11,000 of the United States' 25,000 banks had failed. The failure of so many banks, combined with a general and nationwide loss of confidence in the economy, led to much-reduced levels of spending and demand and hence of production, thus aggravating the downward spiral. The result was drastically falling output and drastically rising unemployment; by 1932, U.S. manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force.

3. Causes of the great depression What caused the Great Depression, the worst economic depression in US history? It was not just one factor, but instead a combination of domestic and worldwide conditions that led to the Great Depression. As such, there is no agreed upon list of all its causes. The following slides shows a list of the top reasons that historians and economists have cited as causing the Great Depression.

4. 1. Stock Market Crash of 1929 Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.

5. 2. Bank Failures Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This exacerbated the situation leading to less and less expenditures.

6. 3. Reduction in Purchasing Across the Board With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.

7. 4. American Economic Policy with Europe As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation.

8. 5. Drought Conditions While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves. This was the topic of John Steinbeck's The Grapes of Wrath.

9. Effects of the great depression The effects of the Great Depression were widespread and painful. Here are some facts about the great depression. In 1932, 40% of the banks that existed in 1929, over 10000 banks, were wiped out taking $2 billion dollars of civilian deposits with them. Industrial stocks lost 80% of their value and international trade was down two-thirds. It was not only the America that felt the effects of the great depression, people in England and the rest of the UK were affected as well. Particularly in North-East of England where unemployment during the Great Depression reached 70% as ship production fell 90%. Other industrial areas suffered greatly, such as Glasgow where unemployment rose to 30%.The Great Depression had many serious repercussions in the political world as well as the economic world. It was one of the main reasons why Hitler was elected and was able to form Nazi Germany.Therefore it may have been and indirect cause of World War Two. Germany was still paying reparations to the Allies from World War One and its industry was heavily supported by loans from the USA. So the ripples and effects of the Great Depression were to be felt for over 20 years.

10. Franklin Delano Roosevelt In his first "hundred days," he proposed, and Congress enacted, a sweeping program to bring recovery to business and agriculture, relief to the unemployed and to those in danger of losing farms and homes, and reform, especially through the establishment of the Tennessee Valley Authority. By 1935 the Nation had achieved some measure of recovery, but businessmen and bankers were turning more and more against Roosevelt's New Deal program. They feared his experiments, were appalled because he had taken the Nation off the gold standard and allowed deficits in the budget, and disliked the concessions to labour. Roosevelt responded with a new program of reform: Social Security, heavier taxes on the wealthy, new controls over banks and public utilities, and an enormous work relief program for the unemployed. In 1936 he was re-elected by a top-heavy margin. Feeling he was armed with a popular mandate, he sought legislation to enlarge the Supreme Court, which had been invalidating key New Deal measures. Roosevelt lost the Supreme Court battle, but a revolution in constitutional law took place. Thereafter the Government could legally regulate the economy.

11. Link to Text To Kill a Mockingbird is set in Maycomb County, an imaginary district in southern Alabama. The time is the early 1930s, the years of the Great Depression when poverty and unemployment were widespread in the United States. For parts of the deep South like Maycomb County, the Depression meant only that the bad times that had been going on for decades got a little bit worse. These rural areas had long been poor and undeveloped.