The fantastic Depression was a worldwide financial collapse that occurred from 1929 to around 1940. During this time in the Combined States, many people lost Everything. Entire families pulled up roots and moved to find non-existent jobs; when they could find an opportunity to work, they were in competition with hundreds of others for that same position. Whole families were dwelling in encampments, seeking shelter under anything they could find; cardboard, scraps of wood, even newspaper. Bread lines were stretched to the limit making an attempt to feed record numbers of starving people. Before we can think about if this disaster could happen again, let’s take a look at what caused it.
Although the stock marketplace collapses in 1929, once in September and again in October, are cited as the direct cause of the great Depression, they were actually one piece in a bigger puzzle. The Combined States, contemporary from a flourishing economic time termed the Roaring Twenties, fell sufferer to a series of events that caused the collapse which lasted until World War II kick started the economy again.
The drought of 1930 was an unpreventable and devastating cause of the fantastic Depression. Farmers, unable to produce plants, were unable to pay taxes and keep workers employed. Farmers abandoned their land and moved to the city in search of employment. Those who moved from the city to the country identified hard labor under hostile environments; those who moved from the country to the city found no opportunities and were pressured to travel from town to town in search of employment.
The stock industry crash certainly played a large role in the collapse of the economy at this time. People who had invested heavily in the stock industry on credit during the previous decade were unable to repay their bank lending products. Investors began to sell shares due to decreasing self-confidence in the marketplace. In turn, financial institutions grew to become less willing to give out lending products, the lifeblood of the banking industry; conversely, people had no self-assurance in the banking system and did not apply for financial loans. banks were uninsured so that when a bank failed, all money was permanently lost. People withdrew their money and hoarded it in the face of the collapsing banking system, causing more turmoil.
The Great Depression: Could It Happen Again?
The Great Depression: The Collapse Heard Around The World
Businesses began to undergo as people with diminishing savings and no prospects lost consumer self-assurance. This led to diminishing profits, more layoffs and higher unemployment. In 1930, in an try to protect American companies,Americaintroduced the Hawley-Smoot Tariff. This was a higher tax on imported Goods, and led to reduced trade with foreign international locations. Added to this was the financial strain left by World War I as countries were unable to pay back monies they had borrowed from theunited Statesduring the war.
Today’s economic uncertainty gives cause to speculation; could the Combined States fall sufferer to another disaster as was seen in the 1930′s? While this is not likely, the classes learned following this collapse should be closely examined to ensure the economy does not endure a second good Depression.