The Great Depression was an economic disaster that affected billions of lives across the globe. Though it began with the crash of the New York Stock Exchange, the effects of this crash were felt for years and resulted in a collapse of many trade networks, as well as interrupting production and distribution of goods globally. This collapse affected the American population greatly, resulting in around 15 million Americans being jobless and almost half the United States' banks failing during the course of the depression.
The Great Depression began with the event known as Black Thursday. It was Thursday, October 24th, 1929, and the NYSE was down for four days, causing panic and a loss of faith in the stock exchange and American economy more generally. People pulled their money from banks, investments and spending went down, and in turn so did production. It was a snowball effect with each factor feeding the next, less spending, more bank panic and failure, less production, and more unemployment. Due to the interconnectedness of the US and European economies, and Europe's connection with the global market the effects of the crash spread quickly throughout the world. Additionally, in 1930 the Smoot-Hawley Tariff Act placed tariffs on many industrial and agricultural goods, which eventually caused global trade to decline and the economic effects to spread throughout the world and various industries. It is estimated that by 1932, nearly 30 million people were unemployed worldwide.
This crash had devastating effects on colonized areas such as Latin America and Africa, where the economy was built around cash crops, many of which were seen as non-essential at the time. As people stopped spending, tariffs increased and trade became more challenging due to the multitude of factors caused by the depression; as a result, the people in these countries suffered greatly.
In response to the depression, many reforms were made in the US and other countries. This included recovery efforts in the form of the New Deal brought in by president Franklin D. Roosevelt beginning in 1933. Changes that came with the New Deal included banking reform laws, emergency relief programs, work relief programs, agricultural programs, union protection programs, the Social Security Act, and programs to aid tenant farmers and migrant workers.
Many countries were able to recover from the depression by 1933, though it is thought that the US did not fully recover from the collapse until as late as 1939. The chaos and instability of the Great Depression are believed to have added to the conditions leading up to WWII, though there is no way to deny that the production of military weapons and the industry that it stimulated the economy in many countries including the US.
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Overview | Great Depression and World War II, 1929-1945 | U.S. History Primary Source Timeline | Classroom Materials at the Library of Congress | Library of Congress
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