The world has seen several ups and downs from time to time. Things have gone down to an extent that it seemed the world might end but we recovered. Similar was The Great Depression that took place in the 1930s. Precisely, it began in 1929 and ended in the late 1930s. Yes! A whole decade! But what was The Great Depression?
The Great Depression can be called on of the most disastrous and longest lasting economic breakdown that the Western world has ever seen. All of this began on October 24, 1929, when the American stock market saw a steep downfall in the stock market. The day was called “Black Tuesday.”
It was a day of perturbation and dismay for all the investors. The investors tried to sell their stocks at any price they could without bothering the loss that would be incurred.
Beginning from 1929, the world saw numerous upheavals. Consumer spending, investments, and industrial outputs declined to a record low. Betwixt 1929 and 1932, the world GDP dropped by around 15%. By 1930, approximately 6 million people were unemployed as compared to 1.5 million in 1929. Unemployment in the United States had risen to 25%-33%. The banks in the country had become dysfunctional and things had gone down to an extent that a large number of people could be seen on the streets selling Apple at meager prices. People had become homeless and farmers lost their fields. This deplorable condition of the people was majorly seen in 1932.
From 1933, the then President of the United States, Franklin D. Roosevelt (swore in on 4 March 1933, Inauguration Day) worked upon various schemes to make the condition better. Only the effects of the breakdown could be lessened to a small extent but it could not be fully recovered. Financial stress was so high that it made the Germans elect Adolf Hitler as their leader in 1933. The Great Depression ended and the World War II began. Things had gone really down but they slowly recovered and by the end of World War II, the condition had improved. Even though World War II had caused massive damage, but financial condition had still increased and was better than before.
According to one of the President’s of the Federal Reserve, namely, Ben Bernanke, the Central Bank’s tight monetary policies were responsible for the creation of the Great Depression. It is said that such kind of Financial Depression will not occur again as all these central economy agencies have learned the lesson but then future is unpredictable and nothing can be said with full conviction.
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