Monday, November 17, 2008

THE GREAT DEPRESSION OF 1929

Many of us still don't really understand the effects of The Great Depression are. Here are some of the articles that we need to examine and make it as a reference for us to prepare if The Great Depression really happens in the first place.

The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as a benchmark in how far the world's economy can fall.

The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday. The end of the depression in the U.S. is associated with the onset of the war economy of World War II, beginning around 1939.

The depression had devastating effects in the developed and developing worlds. International trade was deeply affected, as were 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. Farming and rural areas suffered as crop prices fell by 40 to 60 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as farming, mining and logging suffered the most

The Great Depression was not a sudden total collapse. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929. Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year.

But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the northern summer of 1930.

In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928.

Prices in general began to decline, but wages held steady in 1930, then began to drop 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 other jobs.

The decline in the American economy was the factor that pulled down most other countries at first, and then internal weaknesses or strengths in each country made conditions worse or better.

Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.

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.

1 comment:

Frank Thomas said...

Mr. Lee,

Thank you for this look at the Great Depression. You might be interested in "Pennyland - Echoes of the Great Depression" which I created from an original song written by my brother. Here's the link to the YouTube video:

Pennyland - Echoes of the "Great Depression"

I've also placed it on my website at www.pennyland.org

This is not meant as a political statement, but rather as an attempt to put a face on something that so often appears academic. I hope you might embed this video on your blog, I would certainly value your opinion on this 5 minute film which is our sincere and deep felt work of art.

I thank you. In hard times artists, as much as anyone, need strong advocates to help share their work.

Frank Thomas