great depression 1929
auses of the Great Depression
Introduction
The Great Depression was a global financial crisis that consumed most of the developed world throughout the 1930s. While the first real indications of its onset can be seen at the end of 1929, most countries did not feel its true effects until 1930 or later. When it ended also varied from country to country but signs of recovery were seen in the late 1930s, with things looking up for most economies by 1940.
Importantly, although the Wall Street Crash – which took place in October 1929 – is often seen as an interchangeable term for the Great Depression, this event is simply one of the causes emanating from the US, which led to the longest and deepest worldwide recession of the 20th century. The Great Depression may have come soon after the collapse of the stock market but this does not mean it happened because of it; there are many other factors at play that resulted in a more far-reaching economic crisis.
Overproduction
One of the critical faults that led to the Great Depression was overproduction. This was not just a problem in industrial manufacturing, but also an agricultural issue. From as early as the middle of the 1920s, American farmers were producing far more food than the population was consuming. As farmers expanded their production to aid the war effort during WWI they also mechanised their techniques, a process which both improved their output but also cost a lot of money, putting farmers into debt. Furthermore, land prices for many farmers dropped by as much as 40 per cent – as a result, the agricultural system began to fail throughout the 20s, leaving large sections of the population with little money and no work. Thus, as demand dropped with increasing supply, the price of products fell, in turn leaving the over-expanded farmers short-changed and farms often foreclosed. This saw unemployment rise and food production fall by the end of the 1920s.
While agriculture struggled, industry soared in the
Introduction
The Great Depression was a global financial crisis that consumed most of the developed world throughout the 1930s. While the first real indications of its onset can be seen at the end of 1929, most countries did not feel its true effects until 1930 or later. When it ended also varied from country to country but signs of recovery were seen in the late 1930s, with things looking up for most economies by 1940.
Importantly, although the Wall Street Crash – which took place in October 1929 – is often seen as an interchangeable term for the Great Depression, this event is simply one of the causes emanating from the US, which led to the longest and deepest worldwide recession of the 20th century. The Great Depression may have come soon after the collapse of the stock market but this does not mean it happened because of it; there are many other factors at play that resulted in a more far-reaching economic crisis.
Overproduction
One of the critical faults that led to the Great Depression was overproduction. This was not just a problem in industrial manufacturing, but also an agricultural issue. From as early as the middle of the 1920s, American farmers were producing far more food than the population was consuming. As farmers expanded their production to aid the war effort during WWI they also mechanised their techniques, a process which both improved their output but also cost a lot of money, putting farmers into debt. Furthermore, land prices for many farmers dropped by as much as 40 per cent – as a result, the agricultural system began to fail throughout the 20s, leaving large sections of the population with little money and no work. Thus, as demand dropped with increasing supply, the price of products fell, in turn leaving the over-expanded farmers short-changed and farms often foreclosed. This saw unemployment rise and food production fall by the end of the 1920s.
While agriculture struggled, industry soared in the