The Great Depression

the theory, practice, or system of fostering or developing domestic industries by protecting them from foreign competition through duties or quotas imposed on importations.
Herbert Hoover
31st President of the United States; in 1929 the stock market crashed and the economy collapsed and Hoover was defeated for reelection by Franklin Roosevelt (1874-1964)
Franklin Roosevelt
32nd President of the United States; elected four times; instituted New Deal to counter the Great Depression and led country during World War II (1882-1945)
an official list or table showing the duties or customs imposed by a government on imports or exports.

What is the Great Depression?

The Great Depression was a tragedy in 1929 where The Great Depression in 1929 was first took place in the US where there was a stock market crash. In NewYork "Share price on the Wall Street stock exchange in New York fell to an all-time low. (From An Uneasy Peace booklet"" Later on the Depression spread throughout Europe causing millions of people to be jobless. Countries like Britain and French also uses protectionism on their country which would raised the customs duties on foreign goods coming into their countries. In 1929 the hope for peace of the people in many countries came to and end.

How does the Great Depression affect world peace?

In 1929 the Great Depression raise many conflict upon world peace. One of the most significant conflict in 1929 to 1933 was countries runing policies of protectionism. Although protectionism seem to be the best way a country can protect itself from an economy crash however "in the long run these policies of protectectionism and self-sufficiency harmed international relation". (from Part one, AN UNEASY PEACE, 1929-35 booklet) Another significant conflict cause by the Great Depression was the mass unemployment around Europe. In 1933, there were up to 6 millions Germans lying jobless which was a huge amount of people. In Japan, peasants also starved from the low silk price and in Europe there was a huge poverty due to the very low wheat price.


Effect of the Great Depression on countries around the world

United States: Since the Great depression started in America the United States was one of the country that was extreamly affected by the Great Depression in terms of the economy. In 1933 the unemployment had reached 25 percent and more than 5000 banks had corrupted. The president Herbert Hoover tried many programs to help the economy but almost all failed since other countries increases tariff on American goods. In 1933 Franklin Roosevelt became president and he set up "First New Deal" to help the economy. Some of the things that are in the "First New Deal" reform were :

  • Instituting regulations to fight deflationary "cut-throat competition" through the NRA (National Recovery Administration).
  • Setting minimum prices and wages, labor standards, and competitive conditions in all industries through the NRA.
  • Encouraging unions that would raise wages, to increase the purchasing power of the working class.

external image herbert-hoover.jpgHerbert Hoover external image images?q=tbn:ANd9GcQTTSJRhMknGQ1_UWmjTjQ4amiEJ6PVu9FBecE_e4Fmb3QyEUw9Franklin Roosevelt
This is a graph showing the stock market during the Great Depression.

Britain: In Britain the unemployment went over from 1 million to 2.5 million in 1930 in the Northern industrial areas of Britain. In 1933 the ship production fell 90 percent and in some cities the unemployment rate was as high as 70 percent. However the midlands and south of England weren't affected by the Great Depression as much.

Germany: Germany was one of the countries in Europe that was greatly hit by the Great Depression since Germany's trade was very dependent on foreign trade and had many loans from America. When other countries raised their tariffs on German producta, German exports dried up causing the reduction in industrail production in Germany. In 1932 nearly 30 percent of the population were unemployed and millions of people had to survive without jobs to do. The collapse of Germany's industry also lead Hitler into power.

external image Hitlercomingtopower.JPGexternal image wessel-color.jpg
Hitler used excellent speeches to encourage the Germans during the Great Depression and as a result he came into power.

Analysis Question
What are the main factors that cause the Great Depression?

The Great Depression was a worldwide tragedy in which many countries was affected. Many historians have came up with many reasons that might have caused the depression. However there were 3 main big factors that many historians have cited as important. The Great Depression was caused by the stock market crashing, bank failure, and reduction in spending money.
The first significant event that caused the Great Depression was the stock market crash on the "Black Tuesday", October 29, 1929. This event caused a dramastic fell in chair prices and only 2 month later after the event, stockholders had lost more than 40 billions dollars. In 1930 altough the stock market began to rise, in 1932 the stock market fell 89 percent from its price in 1929. Many historians believe that this event lead to the Great Depression because this event destroyed alot of the people's confidence in investing.As a result many people withdrew money from their accounts causing many banks to become bankrupt.
As banks failed and became corrupt, many banks tried to raise money by calling their loans back from people who didn't have enough time and funds to repay the money. Of course, as a result more and more banks went bankrupt causing the increased demand to withdraw money from banks. "Because of the banking crisis, Banks reduced lending, causing a a fall in investment. People lost savings and reduced consumer spending to save money. The impact on economic confidence was disastrous"
Another main factor that caused the Great Depression was the reduction in spending money of people in all class. Because of the stock market crash and the bank failure many people chose not to invest and and many consumers spent less money on consumer goods. This caused a reduction in the number of items produced. Causing more unemployment around the world and less availability of consumer goods. As the unemployment increased people spent even less money so more and more people were left jobless.


Unit Three-Origins- Practices- Results of World War Two.