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The Effects of the Great Depression

Marcus Dior Lyles

Summer Course

July 16, 2010

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The 1920s was a point in time of much prosperity. Even mid-October of 1929, the regular

middle-class American saw an ³unlimitedview of riches´ (Dixon 1). The thought of poverty was

secure to an end; in 1928, President Herbert Hoover said, ³We didn¶t reach the goal, but given a

opportunity to moveahead with the policies of the past 8 years, and we will soon be within sight

of the day when poverty will be sent away from the nation´ (Dixon 1). The insight of the end of

poverty became known as the American Dream; however, this forethought was abruptly lived.

On Tuesday, March 26, 1929, the administration of Hoover saw the largest stock market decline

of their administration to that time. Numerous months afterward brought Black Monday, the

biggest stock market crash in American history and the cardinal root of the Great Depression.

The Great Depression is one of the most important events in the financial history of the United

States of America, the effects of the Great Depression and also what lead up to it lasted for

numerous years.

The Great Depression was an economic shortfall with worldwide effects thatstarted with

the stock market crash of October 1929; the most intense effect of the Great Depression was the

uppermost rate of unemployment in American history: banks, factories, and stores closed,

leaving millions of Americans unemployed with no money. Without money, many Americans

had to live on either the government or contributions from charities to be attain food; as the

depression went on, however, the Roosevelt administration produced government agencies to aid

in supplying Americans with food, improving the effects of the Great Depression, stopping a

ruinous event like it from happening again (Great Depression).

The group of individuals mainly affected by the Great Depression and the events it

spoken on, were the American stockholders; thousands of stockholders lost huge sums of money

due to the rapid reduction of stock values caused by the crash of Black Monday. Although this

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was a large loss, predicting it was not possible; from 1925 to 1929, the typical stock price of

regular stock on the New York Stock Exchange more than doubled, causing countless people to

make sizeable investments in the stock market in anticipation of making big profits. Even

individuals who had no prior comprehension of the stock market or how it worked tried to invest

in expectancy of profits. Economists, such as Irving Fisher, guaranteed stockholders that they

were ³dwelling on a everlasting, high plateau of prosperity (Dixon 1)´. This, along with the

assurance of countless other reporters and professionals, cause the reputation of being a

stockholder to boost: in 1920, there were barely 29,609 stockholders; a mere ten years later, there

were 70,950. Stockholders¶ unawareness of how the stock market worked quickly turned against

the thousands of investors in America and increased throughout the remainder of the United

States, halting economic course(Dixon 2).

The Depression had a significant effect on the United States; however, the United States

was not the only place to feel the penalties of the Great Depression: Canada was also greatly

affected (The Global Effects of the Great Depression 1). Until that time, Canada¶s economy

depended on the export of grain and other raw resources. The people who exported these goods

suffered large losses after other countries amplified tariffs on imported goods. Following the

closing of numerous Canadian companies, the unemployment rate in Canada increased from

three percent in 1929 to twenty-three percent in 1933 (Great Depression).

Further governments were affected by the Depression as well. As the Depression was at

its peak in 1933, the single country that experienced it as hard as the United States of America

was Germany (Garraty 182). Approximately six million persons in Germany were left jobless.

Many aspects of German life led to these miserable times. Most foremost were the reparations

Germany was still paying from World War I. Chaos increased in Germany following the war,

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causing a high in inflation in 1923; Germany was just recuperating when the stock market crash

struck (Effects on Germany 1). Another factor in the economic decline was the German

government. Germany suffered a chain of underprivileged leaders; the chancellors of 1932, as

Herbert Hoover said, were not capable to deal with the effects of the deepening Depression. On

January 30, 1933, Adolf Hitler was voted thehead of government of Germany (Garraty 183). The

headship of Hitler, one of the key figures in the aid of the Great Depression both in Germany and

universal, marked the foundation of the fall of the Great Depression.

The events beginning in 1933 meant at relieving the Great Depression in the United

States and Germany had a key influence on other nations, mainly Great Britain (Garraty 214).

Great Britain, unlike the United States, had a declining economy prior to the stock market crash

of October 1929 (Smitha 27); however, the British economy did not endure a morbid crash, as

did the economies of the United States of America and Germany (Effects on the United

Kingdom 1). Britain did, though, suffer declines mutually with imports and exports during the

Depression. In relationship to other prosperous nations during the moment of the Great

Depression, the United Kingdom stayed in a fairly stable economic status (Effects on the United

Kingdom 2).

Unlike Great Britain, the Great Depression strucka lot of other countries in Europe vastly.

One of these unsuccessful countries was France, the last foremost nation of at that point in time

to feel the effects of the Great Depression; the explanation for the belated impact on France was

the undervaluation of the French Franc (Effects on France 1). France was soothed by the help of

the United States to give simplicityto the Depression (Garraty 214). Finally, in 1932, the

Depression viciously found its way to France: the number of tourists decreased and exports of

perfume fell, as did those of wine, food, and other merchandise (Smitha 23). Even while the

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Depression hit France late, it came viciously. Unemployment increased fifteen percent and

industrial production decresed twenty-five percent from their levels in 1929. In hope of a

modification, André Tardieu was elected to run a new French government in 1932; he obtained

his popularity by shooting his campaign towards the risk of communism (Smitha 24). Like many

other countries, France finallygot through the Depression duringit¶s connection in World War II,

which producedwork for people and caused money to begin to make it way around once again.

The Great Depression also struck Italy, with its greatly regarded corporate-fascist

government led by Mussolini. The public saw the unreliable policy changes Mussolini made as

genius; however, these adjustments didn¶t benefit the economy. Even still Italy¶s contribution to

world production and manufacturing was behind three percent, it increased from the recession in

1934 (Smitha 26).

The United States,eventually came forward from the deficits of the Great Depression as

well as the other countries. At the head of this recovery was World War II: it increased

manufacturing and produced millions of jobs. In addition, helping in the recovery were

government agencies, such as the Tennessee Valley Authority (TVA); the TVA was formed in

May 1933 to administer the development of a 640,000 square mile section in the Tennessee

Valley (Smitha 36). The Tennessee Valley was a region in which sharecroppers and farmers

were scrawny and soils were useless for developing agricultural products. The TVA intended to

help this region and bring back a sizeable amount of agricultural production to the United States

(Smitha 36). Although there were numerous other agencies, such as the Civilian Conservation

Corps (CCC), the Federal Emergency Relief Administration (FERA), and the Public Works

Administration (WPA), most of them pursued in the footsteps of the TVA: they were aimed at

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producing jobs while at the same time either improving the United States or increasing the

economy (Great Depression).

The Great Depression deeply affected the United States and the world as a total for

numerous years. The Depression has qualified governments around the globe how to deal with

economic troubles in hope that it will not occur again. Wecter Dixon said, the stock market could

be very lucrative:

If a man sets aside $15 for a week, and put it in good stocks, and allows the extra and

rights to build up, at the last part of the twenty years he will have $80,000 and an income

from savings of around $400(mon). He will be wealthy. And because income can do that,

I am definite in my belief that anyone can not only be rich, but ought to be rich (4).

However, the stock market crash of October 1929 and the consequent depression

imformedstockholders to how volatile being caught up in the stock market without knowledge

could be. Even in the presentrecession, many world leaders are subjective by actions taken to end

the Great Depression to revive economic circumstances.

Due to its incredible effects in the United States and all over the world, the Great

Depression is well-known in history as a slender escape from the downfall of the world

economy. Hopefully, one day the world economy will be as rich and affluent as the roaring

1920s, and America and the rest of the world will be chasing the ³American Dream´ once again,

barring another unforeseen event such as the Great Depression.

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Dixon, Wecter. The Age of the Great Depression, 1929-1941. New York: Macmillian, 1952.

Effects on France. 12 April 2009 <http://www.thegreatdepression.co.uk/effects-on-france/>.

Effects on Germany. 12 April 2009 <http://www.thegreatdepression.co.uk/effects-on-germany/>.

Effects on the United Kingdom. 12 April 2009 <http://www.thegreatdepression.co.uk/effects-on-

the-united-kingdom/>.

Garraty, John A. The Great Depression: An Inquiry into the Cause, Course, and Consequences of
theNinteen-Thirties as Seen by Contemporaries and in the Light of History. 1st Edition. Orlando:
Harcourt Brace Jovanovich Publishers, 1986.

"Great Depression." World Book Encyclopedia 2001: 338-43.

Smitha, Frank E. The Great Depression, to 1935. 1998-2005. 11 April 2009

<http://www.fsmitha.com/h2/ch15wd.html>.

The Global Effects of the Great Depression. 20 March 2008. 11 April 2009
<http://recessionhistory.info/the-global-effects-of-the-great-depression/>.

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