The Great Depression Essay Example | Topics and Well Written Essays - 1250 words

The Great Depression - Essay Example The great depression was an economic disaster that affected Europe, North America and other industrialized nations for a period of one decade; from 1929-1939. The depression was the worst depression the Western industrialized world has ever experienced in the modern times (McElvaine 46). America started feeling the depression earlier than other countries due to the collapse of the prices of stock market of the New York Stock Exchange in the year 1929. Within the next few years, the stock price continued falling; they lost their value with a decrease of 20%. This decrease in assets’ value ruined countless numbers of investors, and the performance of banks started declining. Many financial institutions could not withstand the strain from the ensuing depression. People lost trust in the economy and minimized their levels of demand and spending (Burgan 117). Consequently, production declined with a big margin; the overall consequences of these situations escalated the advancement of the great depression. Sudden fall in output led to a deadly situation of unemployment in America because more than fifteen million Americans lost their jobs. Although the utter depression began in the US, it swiftly became an international economic crisis because of the close relationships, which developed between the European economies and US after the First World War (Burgan 117). The US was the chief creditors of Europe during and after the war since the European economies were destabilized by the war debts and the war itself. Other nations like Germany had suffered heavy economic strains due to defeat in the battle because they were required to reimburse war damages. This c onnection was extremely tight and close. When the American economy crushed down, the Europeans countries were also affected since the flow of traders and investors to Europe ceased. Unemployment in Germany skyrocketed within a short period claiming the jobs of more than six million people (McElvaine 46). The great depression was a bit soft on Britain because the unemployment levels were not as high as in America and Germany. However, Britain’s export and industrial sectors were depressed for a longer period that other countries, and they only recovered in the mid 1940s. All countries came up with strategies that would guard the domestic industries and boost their production. Nations imposed tariffs and increased the existing tariffs to discourage international trade (Downing 94). Imports were crowded with quotas; this resulted to a decline in international trade with more than half. When the world trade collapsed, the international economy was disintegrated into trading blocs , which were influenced by currency of trade and political allegiance. This trade between blocs was open to many countries. Political implications of the great depression The political implications of the great depression were profound. Countries such as Japan and Germany reacted to the depression by forming militarist governments who came up with regressive foreign policies, which resulted to the Second World War. In Britain and the US, the government intervened in the issues that affected people by forming welfare system for the citizens (McElvaine 47). The government managed all the economies with little intervention from individuals. President Roosevelt came up with employment schemes, which aimed at reducing unemployment. People were given street cleaning jobs and painting the public buildings. Further, Roosevelt came up with policies that supported the industrial and agricultural sectors. Although these measures did not yield to rapid economic recovery, they enhanced the overa ll