Black Tuesday, Stock Market Crash
The Great Depression, an immense tragedy that placed millions of Americans and people all over the world out of work, was the beginning of government involvement in the economy and in society.
After nearly a decade of optimism and prosperity, the United States was thrown into despair on October 29, 1929. The day the stock market crashed and the official beginning of the Great Depression. Thousands of investors lost large sums of money and many lost everything.
Masses of people tried to sell their stock, but no one was buying. The stock market, which had appeared to be the surest way to become rich, quickly became the path to bankruptcy.
The Wall Street crash was just the beginning. The following period was the longest and worst period of high unemployment and low business activity in modern times. Many people came to depend on the government or charity to provide them with food.
Since many banks had also invested large portions of their clients' savings in the stock market, these banks were forced to close. Seeing banks close caused panic across the country. Afraid they would lose their own savings, people rushed to banks that were still open to remove their money. This massive removal of cash caused more banks to close.
Businesses and industry were also affected. Having lost much of their own capital in either the market crash or the bank closures, many businesses started cutting back their workers' hours or salary. But some businesses couldn't stay open even with these cuts and soon closed their doors, leaving all their workers unemployed.
The Depression became a worldwide business crash on the 1930's that affected almost all nations.
These nations wanted to protect their domestic production by imposing tax, and raising existing ones. The effect of these restrictive measures was to greatly reduce the volume of international trade. Some nations changed their leader and their type of government.
The failure of so many banks, combined with a general and nationwide loss of confidence in the economy, led to reduced the levels of spending and demand and consequently of production.
United States had emerged from the war as the major creditor and financier of postwar. Countries whose economies had been weakened by the war itself, the case of Germany and other defeated nations, they needed the U. S. to pay war reparations. So once the American economy slumped and the American investment credits to Europe ended; prosperity collapse there as well.
In Germany, poor economic conditions led to the rise to power of the dictator Adolf Hitler. The Japanese invaded China, developing industries and mines in Manchuria. Japan stated this economic growth would relieve the depression. This militarism in Germany and Japan eventually led to World War II.
In the United States, President Herbert Hoover was detained when the Great Depression began. The economy continued to drop almost every month. And in 1932, Franklin D. Roosevelt was elected President.
Some people say that the Great Depression was caused by primary the imbalances in the U.S. economy, which was hidden by the boom psychology and euphoria of the 1920s.
The Great Depression - History Channel
The Great Depression of 1929 - Documentary
No comments:
Post a Comment