The Great Depression was a worldwide economic decline which occurred in 1930’s. It was the longest period of unemployment beginning from 1921 to 1930s. It was majorly caused by the drop in the stock values which saw many stockholders loosing large amounts of money. Many Banks, factories and stores closed and left millions of Americans jobless and vulnerable of the effects of poverty. Most families which were initially independent had to survive on charity donations as people became jobless. The effects of the Great Depression had worldwide social, economic, and political impacts. It caused a sharp decrease in the world trade because each country raised taxes on their imports as a strategy to help their own industries. Some countries even had to change their systems of government with others even electing new leaders.
Causes of the Great Depression
The Depression was largely a result of the failure in the stock market in New York. Shortly before the Depression, the price of the common stocks on the New York Stock had risen to Exchanged more than doubled (Modern American Poetry, 2011). The rising in he stock prices attracted many people to invest in the market with the hope of making large profits with increase in prices in the future. Unfortunately this was not to be the case in 1929 when the stock values dropped tremendously (Modern American Poetry, 2011).
The depression was also partly caused by the weaknesses and the imbalances within US economy. Scholars have indicated hat prior to the Depression, there was a nation wide speculation in the 1020s. Irrespective of the changes that ere taking place in the market, the country was also able to cope with the vicious economic cycle. The State failed to take any action to correct the looming business down turn. The government instead opted to leave the market forces to control the market, worsening of the depression.
Impacts of the Depression
The depression left millions of American people suffering from malnutrition while many also lost their homes because they didn’t have enough money to pay their mortgage. Many young people and several families began roaming throughout the country in search for food clothing and shelter and employment. Education programs were also affected as the rate of high school dropout rose to four millions. The country also witnessed some form of instability from many protests organized by its citizens (Burgan, 2011).
The Impact on other Nations
Even though the Depression began in the United States, its impacts quickly spread to the other parts of the world. This was because the country had economic ties with other world economies especially that of the European. The United States had emerged from the World War I as the major creditor and financier of post war Europe, whose national economies was greatly weakened by the war (Burgan, 2011). All the nations that were indebted to the United States like Germany and the Great Britain were hardly hit by the Recession. These countries witnessed great increase in the rate of unemployment especially in Germany while Britain’s industrial and export sectors were greatly affected until the WW II (Modern American Poetry, 2011).
Politically, The United States government was also forced into passing new laws which resulted into the government more powers than it had ever had. After the depression the government assumed the role of ensuring the economic stability in most industrial nations with market economies. The Economic distress led to the election of a democrat Candidate Franklin Roosevelt as the president of the United States in 1932. The new president increased the government regulation and massive public-works projects in an attempt to quicken the state’s economic recovery (Modern American Poetry, 2011). However, the country never witnessed much recovery up to after WW II. In Germany and Japan, reaction to the Depression led to the rise of militant governments who adopted the regressive policies that are seen to date to be the cause of the Second World War (Romer, 2009).
The Collapse of the World Trade: The Depression led to the reorganization of the international economy into trading blocks. World trade was for along time largely influenced by the political allegiances and the currency used. Trade was limited within the blocks. Almost all nations came up with measures to protect their domestic production by imposing tariffs on imports. These measures greatly reduced the volume of international trade which had fallen by more than a half in the year1932 (Burgan, 2011).
Unemployment: Millions of the American citizens lost the employment. This sent hundreds of families and thousands of people roaming around the country in search of food, work and shelter. Many people therefore had to survive on relief food. Several unemployed and jobless young men were enrolled in work camps to participate in various conservation projects all over the country to be paid small money for upkeep (Modern American Poetry, 2011).
Agriculture was also affected especially by the hitting of the Great Plains with drought and dust storms. The impact of erosion was getting worse day after say because of overgrazing and drought effects which caused the grass to dry up exposing the top soil. Famers most of whom were already in debts lost their crops and had no other alternative source of income (Burgan, 2011).
End of the Great Depression
The end of the Depression has been credited to President Roosevelt. He came up with his New deal programs which were seen to be the force behind the ease of the hardship of the Great Depression. However, the full recovery of the United States came by its entry into the WW II with the increase in demand of their weapons artillery, ships, and airplanes by the warring nations. American men were trained and recruited into the countries military while more women secured employment in the factories (Romer, 2009).