The Great Depression

The stock market crashed on October 29, 1929, triggering the Great Depression in America. Speculation in the market by a wide range of economic levels had inflated the prices of stocks beyond what could be expected in actual earnings by those companies.

 

When the crash hit, people had their savings wiped out because of the money invested in stocks. Banks were unable to cash out accounts, and loans went unpaid, forcing banks to shut down.

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As economic panic took hold, people were even less likely to spend money, deepening the economic downturn. Production slowed, and industrial workers lost their jobs. The unemployment rate rose dramatically.

 

Agriculture also took taken heavy hits as droughts had destroyed crops and forced farmers to take out loans, which they couldn’t repay.

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The Effects in Europe 

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These events also heavily affected international trade and soon the Great Depression began to affect the economies of other countries, especially those who had trade negotiations with the United States. England, France, and Germany were affected the most as industrial production, trade and wholesale prices dropped and unemployment rose.

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United States Recovery

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Each individual country affected by the drastic economic downturn took steps to recover their respective economies. President Franklin Delano Roosevelt took office in March of 1933 and was largely responsible for actively pulling the United States out of the heavy depression. His plans for bringing the economy back were collectively known as the New Deal.

 

He spent millions of dollars bolstering banks and industries, created thousands of government jobs, and through it all, broadcasted “fireside chats” to the country, giving them a sense of security.

 

With the rise of the Nazi party in Germany, the country began increasing industrial production. This increased employment in the country and cast off the Depression in preparation for the coming World War.