The Great Depression was a severe worldwideeconomic depression in the decade preceding the second world war.. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s. It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can go down.The depression originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crashing of October 29, 1929 From there, it quickly spread to almost every country in the world.
The Great Depression had devastating effects in virtually every country, rich and poor. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%. Cities all around the world were hit hard, especially those dependent on industry.Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%.Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as mining and logging suffered the most.
Some economies started to recover by the mid-1930s; in many countries the negative effects of the Great Depression lasted until the start of World War II.
There were multiple causes for the first downturn in 1929. These include the structural weaknesses and specific events that turned it into a major depression and the manner in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like major bank failures and the stock market crash.
Canada was hit hard by the Great Depression.. Between 1929 and 1939, the gross national product dropped 40% (compared to 37% in the US). Unemployment reached 27% at the depth of the Depression in 1933. Many businesses closed, as corporate profits of $398 million in 1929 turned into losses of $98 million as prices fell.By 1933, 30% of the labour force was out of work, and one fifth of the population became dependent on government assistance. Wages fell, as did prices. Gross National Expediture had declined 42% from the 1929 levels. In some areas, the decline was far worse. In the rural areas of the prairies, two thirds of the population were on relief.
Further damage was the reduction of investment: both large companies and individuals were unwilling and unable to invest in new ventures.
In 1932, industrial production was only at 58% of the 1929 level, the second lowest level in the world after the United States, and well behind nations such as Britain, which only saw it fall to 83% of the 1929 level. Total national income fell to 55% of the 1929 level, again worse than any nation other than the United States.
In the USA, President Hoover started numerous programs, all of which failed to reverse the downturn.] In June 1930 Congress approved the Smoot Hawley Tariff Act which raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. Other nations increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression. In 1931 Hoover urged the major banks in the country to form a consortium known as the National Credit Corporation (NCC). By 1932, unemployment had reached 23.6%, and it peaked in early 1933 at 25%, drought persisted in the agricultural heartland, businesses and families defaulted on record numbers of loans, and more than 5,000 banks had failed.] Hundreds of thousands of Americans found themselves homeless, and began congregating in shanty towns- that began to appear across the country. In response, President Hoover and Congress approved the Federal Home Loan Bank Act t, to spur new home construction, and reduce foreclosures. The final attempt of the Hoover Administration to stimulate the economy was the passage of the (ERA) which included funds for public works programs such as dams and the creation of the Reconstruction Finance Corporation (RFC) in 1932. The RFC's initial goal was to provide government-secured loans to finances, railroads and farmers. .
yet, the Stock Market was just the beginning. Since many banks had also invested large portions of their clients' savings in the stock market, these banks were forced to close when the stock market crashed. Seeing a few banks close caused another panic across the country. Afraid they would lose their own savings, people rushed to banks that were still open to withdraw their money. This massive withdrawal of cash caused additional banks to close. Since there was no way for a bank's clients to recover any of their savings once the bank had closed, those who didn't reach the bank in time also became bankrupt.
Businesses and industry were also affected. Having lost much of their own capital in either the Stock Market Crash or the bank closures, many businesses started cutting back their workers' hours or wages. In turn, consumers began to curb their spending, refraining from purchasing such things as luxury goods. This lack of consumer spending caused additional businesses to cut back wages or, more drastically, to lay off some of their workers. Some businesses couldn't stay open even with these cuts and soon closed their doors, leaving all their workers unemployed.
In previous depressions, farmers were usually safe from the severe effects of a depression because they could at least feed themselves. Unfortunately, during the Great Depression, the Great Plains were hit hard with both a drought and horrendous dust storms.
Years and years of overgrazing combined with the effects of a drought caused the grass to disappear. With just topsoil exposed, high winds picked up the loose dirt and whirled it for miles. The dust storms destroyed everything in their paths, leaving farmers without their crops.
Small farmers were hit especially hard. Even before the dust storms hit, the invention of the tractor drastically cut the need for manpower on farms. These small farmers were usually already in debt, borrowing money for seed and paying it back when their crops came in. When the dust storms damaged the crops, not only could the small farmer not feed himself and his family, he could not pay back his debt. Banks would then foreclose on the small farms and the farmer's family would be both homeless and unemployed.
During the Great Depression, millions of people were out of work across the United States. Unable to find another job locally, many unemployed people hit the road, traveling from place to place, hoping to find some work. A few of these people had cars, but most hitchhiked or "rode the rails."
A large portion of the people who rode the rails were teenagers, but there were also older men, women, and entire families who traveled in this manner. They would board freight trains and crisscross the country, hoping to find a job in one of the towns along the way.
When there was a job opening, there were often literally a thousand people applying for the same job. Those who weren't lucky enough to get the job would perhaps stay in a shantytown outside of town. Housing in the shantytown was built out of any material that could be found freely, like driftwood, cardboard, or even newspapers.
The farmers who had lost their homes and land usually headed west to California, where they heard rumors of agricultural jobs. Unfortunately, although there was some seasonal work, the conditions for these families were transient and hostile. Since many of these farmers came from Oklahoma and Arkansas, they were called the derogatory names of "Okies" and "Arkies.
To many at the time, President Roosevelt was a hero. They believed that he cared deeply for the common man and that he was doing his best to end the Great Depression. Looking back, however, it is uncertain as to how much Roosevelt's New Deal programs helped to end the Great Depression. By all accounts, the New Deal programs eased the hardships of the Great Depression; however, the U.S. economy was still extremely bad by the end of the 1930s.
The major turn-around for the U.S. economy occurred after the bombing of Pearl Harbor and the entrance of the United States into World War II. Once the U.S. was involved in the war, both people and industry became essential to the war effort. Weapons, artillery, ships, and airplanes were needed quickly. Men were trained to become soldiers and the women were kept on the homefront to keep the factories going. Food needed to be grown for both the homefront and to send overseas.
It was ultimately the entrance of the U.S. into World War II that ended the Great Depression in the United States.
Mom told me that the depression period was very hard, she remembers walking to town to see the nuns to get food for us children. She remembers going to a cookie warehouse and getting cookies for the kids. The women used to take any job they could get just to get a little pay. My mother in law used to go pick oysters and sell them door to door. Imagine having to survive that way, but you never know, the way things are going right now it can happy again. Found a few tips to share in case there is another recession:
Band together and help each other, don’t buy what you cannot afford, walk or carpool to save money, drive a bike it is cheaper. Shop where the bargains are, and shop for clothes at thrift stores they have great assortments of clothing. Instead of going to clubs and parties ,stay at home and play cards , shop at the dollar stores. Make a budget and stick to it. Save on groceries if there are coupons collect them. I imagine if we have a depression again our lifestyles has to change. So if we think and plan ahead maybe it will be a little easier to deal with. Hope you enjoyed today’s blog. I found a lot of this information online and wanted to share it with you.
Well changing the subject I am still into genealogy, and have a few brick walls to knock down, so far it isn’t happening but my motto is take one day at a time.
I have also created a few items I would like to share with you you can find them at http://www.zazzle.com/allicor* and at http://www.zazzle.com/boot_eek* Enjoy and see you next time.
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