The Great Depression

The Great Depression was a nightmare for industrialized world lasting from 1929 to 1939. The beginning of the great depression was after the crash of stock market in October 1929 which sent a wave of panic and fear as million of investors were wiped out. The coming year was even tougher for country's economy, approximately 15 million Americans were unemployed and half the country's bank failed. Investment and expenditure dropped causing industrial declines, factory worker’s being laid off. By 1933, the great depression reached its lowest point.

Cause of Great Depression

In the 1920s, the U.S. economy expanded rapidly, the nation’s total wealth increased by double from 1920 to 1929 and the period was called as “the roaring twenties.”
The stock market centered at the New York stock exchange on Wall Street in New York City. Wall Street was the scene of carefree opinion and belief, everyone was pouring their investment in stock market, and millionaire tycoons to cooks were investing in stocks. As a result the stock market underwent a rapid expansion, reaching its peak in August 1929.
By then, production had already declined and unemployment was at its peak, stock prices were much higher than their actual value, agriculture sector was struggling due to drought and falling food prices, banks had an excess of large loans that could not be pay off. As consumer spending slowed and unsold goods began to pile up, which led to slowed factor production, stocks continued to rise, by the fall of that year had reached excessive levels that could not be justified be expected future earnings.

Stock Market Crash of 1929

On October 24, 1929, a record 12.9 million shares were traded that day known as “Black Thursday”, five days later on October 29 approximately 16 million shares were traded after another wave of panic swept Wall Street this day was known as “Black Tuesday”. Millions of shares ended up worthless, investors who bought the stock borrowing money were wiped out completely. Confidence vanished in the wake of stock market crash, downturn in spending and investment led factories and other business to slow down production and begin firing their workers. Many Americans were forced to buy on credit and fell into debt, foreclosures and repossessions climbed steadily. The global loyalty to the gold standard, which joined countries around the world in a fixed currency exchange, helped economic adversity from the United States throughout the world, especially Europe.

By: Abhishek singh

Content: www.history.com