Great Depression Information

The Great Depression was a time of economic down turn, which started after the stock market crash on October 29, 1929, known as Black Tuesday. It began in the United States and quickly spread to Europe and every part of the world, with devastating effects in both then industrialized countries and those which exported raw materials. International trade declined sharply, as did personal incomes, tax revenues, prices and profits. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Mining and logging areas had perhaps the most striking blow because the demand fell sharply and there were few employment alternatives.

The Great Depression ended at different times in different countries. The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right.

The Great Depression was not a sudden total collapse; the decline came in many fits and starts over a period of three years, reaching the bottom in March 1933, with occasional small upward blips. In the spring of 1930, credit was ample and available at low rates, but people feared for the future and were reluctant to add new debt by borrowing. Auto sales declined below the levels of 1928 at the end of May, 1930. Prices declined across the board, but wages held steady until they started down in 1931. Conditions were worst in farming areas where commodity prices plunged, and in mining and logging areas where unemployment was high and there were few alternative jobs. The decline in the American economy was the motor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better.

There are multiple reasons on what set off the first downturn in 1929, concerning the structural weaknesses and specific events that turned it into a major depression, and the way in which the downturn spread from country to country. In terms of the 1929 small downturn, historians emphasize structural factors like massive bank failures and the stock market crash, while some economists point to Britain's decision to return to the Gold Standard at pre-World War I parities (US$4.86:£1).

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