Prices fell, production was cut back and workers were discharged. As a result, the economy entered the depression phase of the cycle. The crisis stage of the cycle was brought about by bank failures and by irrational selling of stocks ;thus causing business failures, a slowing in production, a rise in unemployment, and an overall optimistic view about the future. Lionel Robbins was a professor at the London School of Economics. An example of Robbins philosophy was that the monetary confusion and rampant inflation after the war had hampered.
Many policies that the government put out hurt and slowed the recovering economy. One act known as the American Hawley-Smooth of crushed the European industry which was already unstable from the depression. It stopped European trade and prevented European from earning the almighty dollar.
This Act also destroyed any possibilities of regaining the money loaned to them during World War I. The collapse of the German Banking system in had monumental affects on the entire world. It aided to turn, what would have been, a small economic problem into the Great Depression. The Germans also blamed the depression on the harsh terms imposed by the Versailles Treaty, especially the reparation they were forced to pay.
They claimed the reparations brought down the economic vitality of their country to an all time low. Not one single book I have read has blamed any one specific country for the start of this catastrophe. As a matter of fact, each book has said if the countries would have worked in unison rather than focusing solely on themselves we might not have ever heard of the Great Depression. Nobody knows what the result would have been if the countries worked together and resolved the problem before it festered as it did.
No one ever envisioned the extensive duration of the depression. My only prayer is that we never see another time like this again. When American producers cut back on their purchases of raw materials and other supplies, the effect on other countries was devastating. After Great Britain was again forced to leave the gold standard in , many foreign banks withdrew deposits from America in the form of gold: High unemployment was the most alarming aspect of the Great Depression.
It has been estimated that in about thirty million workers were jobless, about two-thirds of these in three countries — the United States, Germany, and Great Britain. If anything, this estimate is low. The homeless rate increased dramatically. So much so that many people did not even have a roof over their heads. The majority of homeless people had nothing at all and the minority made shacks on vacant land: Women played a new role during this time. When a man lost his job and was having difficulty locating a new one, it was up to the women to work.
Worldwide, in about one-third of all workers were women. There was also, however, the more immediate problem of what to do about the people who were unemployed and needed assistance merely to survive. Whether efforts to aid the unemployed would help to end the depression or make it worse was a matter of risk-taking. Another way to solve the unemployment problem was to export people to other countries that had available jobs so that people could survive.
The hit that the farmers went through could not enable them to pay their debts. They could also not make it to feed their families, not mentioning themselves. Some of the farmers had also capitalized on the stock market and bank. Since the stock market was affected, and as a result, the banks too, the farmers suffered as well. Losing their investments and crops influenced greatly the way they related with each other and had an impact on their contribution to the economy of the land.
Many people lost their jobs during this time of the Great Depression. Having lost their jobs, it was very difficult for people to bring food on the table. Families were even forced to sell their houses and move to apartments. Others were made to move in together since the standard of living was going down day by day. Paying rent was now a very hard thing to achieve. It was even complicated for people to separate or divorce.
This was the time when the rate of separation and divorce went down. This is because everyone needed the other to contribute, especially in paying the rent. Due to ego, men who had already lost their jobs felt ashamed even to walk in the cities, and, therefore, they were forced to stay in their homes. If at all the wives and the children were working, they felt that their status was challenged. Even in this situation, the two categories aforementioned were forced to go looking for jobs.
As a matter of fact, it was hard to get jobs locally because every part of the country had been affected. Many people were seen on the roads looking for jobs. Many people could not afford luxurious goods like cars, and thus, very few cars were seen on the roads.
A lot of the cars were on sale since maintenance costs were unaffordable. The majority of teenagers were affected as they were the people who were seen on the roads walking up and down looking to get some job Martin Older men, women, and families at large were on the rails too. They would be seen boarding trains just to cross and see whether they could get some occupation. Those who could not get the job would end up living in shanty towns which were outside the town.
The houses in such places were made of affordable cheap materials like newspapers, wood, mud, cardboard, and iron sheets. Farmers who could no longer afford their previous lives would be found in western California. This is because of the agricultural opportunity rumors that came from that area. It is true that there were periods of agricultural opportunities. The farmers were nicknamed as Okies and Arkies. The citizens always blamed the governing President, though he always talked about optimism.
Some of the shanty towns which were far from big cities were named after him — for instance, Hoovervilles. Interestingly, newspapers used to cover people sleeping in the streets were called Hoover Blankets. What is more, even bad looking broken cars were referred to as Hoover Wagons Martin The Great Depression had a huge impact in that it caused human suffering. It took a very short time, and the levels of living went down drastically.
People started borrowing from each other just to survive. Unemployment increased since industries could not take employees anymore. They could not afford to pay the people what they deserved. Research shows that at least a fourth of the labor force in all the industrialized countries could not work anymore Martin The industries could not satisfy them in terms of wages. This was noticed in , and the total recovery was only realized by the end of that decade. End of international gold standard.
The Great Depression is seen as a cause of international gold standard. There was no money to invest anymore, and it was evident that the interest rates went down too. There was also the introduction of floating rates, and people stopped using the fixed exchange rates. On the other hand, there was an expansion of the welfare state and labor unions in Union membership went to an extent of doubling between that year and This was a result of extreme unemployment and the National Labor Relations Act which was passed in All this led to collective bargaining.
The US took an extra mile of coming up with unemployment compensation. This was incorporated in the Social Security Act the same year. Its aim was to cater for the hardships that the citizens were going through in The rate at which the government regulated the economy increased substantially. The focus was mostly on the financial markets. Different bodies to carry out this function were established. These included the Securities and Exchange Commission which was established in The main role of these institutions was to control and regulate stock issues in the stock market, especially with regard to the new products.
The Banking Act went ahead to come up with deposit insurance, whose role was to work with the banks by prohibiting them from underwriting. Deposit insurance was not so popular in the world up to the Second World War.
This time it was able to work effectively, hence achieving its mission and objectives. Growth of macroeconomic strategies. The aim of the latter was to fight the economic upturns and downturns. As a matter of fact, different strategies were established to fight the Great Depression. An increased focus on how the government spend, tax cuts, and expansion of the monetary fund were some of the ways to fight the the phenomenon under consideration. The government was also trying to work to its best so as to fight unemployment.
The banks were also working against recessions. Homelessness, discrimination and racism. Many people had lost their jobs and it became even hard to get rent for their houses. They had to move to shanty areas which also were not very affordable. Others could not afford anything to cover their heads.
This led to building the Hoovervilles. Since so many people were unemployed, there was a huge competition in the job market. Very few could get jobs, and those who did were not paid according to what they delivered. Under the circumstances, discrimination grew and African Americans could rarely get a job. Racism was an issue at that time. Americans were more aggressive as they noticed that there were shrinking opportunities to get a position. This is because of the discrimination and racism that were going on.
Again, the whites were claiming the jobs which were paying poorly, hence occupying the opportunities that these minorities had before Hoovervilles. It is evident that in any country there are different levels of people as far as their income is concerned.
Where people live is different depending on what one eats.
The Great Depression was horrendous, no other panic or depression that taken place before can add up to the economic and social devastation that The Great Depression inflicted. However before the Great Depression even happened there was a Bull Market boom.
The great depression is an immense tragedy that took millions of people in the United States from work. It marked the beginning of involvement from the government to the country’s economy and also the society as a whole. After almost a decade of prosperity and optimism, the .
“The Great Depression of the ’s was a worldwide phenomenon composed an infinite number of separate but related events.” The Great Depression was . This essay on the great depression highlights the events that led to this period in history. It offers an insight into the key individuals that played a role, and an analysis of causes and effects of this era.
The drought that helped cripple agriculture in the Great Depression was the worst in the climatological history of the country. By it had dessicated the Great Plains, from North Dakota to Texas, from the Mississippi River Valley to the Rockies. The Great Depression was the worst and longest economic downturn in the history of the world economy. The Depression began in and lasted until This economic meltdown affected Western industrialized economies but its effects spread across other nations.