Facts about The Great Depression

The Great Depression began in 1929 and lasted throughout the 1930s. Within three years
of the Wall Street Crash, 40% of banks closed and most company stock values plummeted
by 80%. So what were the effects of the Great Depression to people around the world?
Available credit became harder to come by and many lending institutions called in loans.
Those struggling to make monthly payments on their automobiles, homes and household
goods had their purchased repossessed.
At the start of the Great
Depression, there was no
welfare system in place. Lower
industrial production led to
mass unemployment and
many unemployed found
themselves without a home or
food for their families. Job
insecurity was on everyone’s
mind and wage cuts were
always threatening, as were a
reduction in working hours.
Shantytowns were a common
sight as families lived in basic
shelters and ate from soup
kitchens. For many, these
hardships changed their
outlook on life after the
depression years. For some, building up security through material possessions became an
obsession, where as other people did the exact opposite. They became very frugal and
were very careful with their savings so as to protect their families from similar hardships in
the future. Many wealthy people were affected by the Great Depression as well. Stock
market investors had substantial losses and those living a good lifestyle on goods bought
on hire purchase had to be careful to avoid getting behind in their payments.
The whole industrialized world was
affected by the Great Depression.
Global trade deceased significantly
when countries introduced trade tariffs
to protect their own domestic
economies. Reduce tax revenue
resulted in lower government
spending which, in turn, led to even
lower demand for consumer goods.
Construction projects around the
world came to a virtual standstill. In
the United Kingdom, large-scale
unemployment was a problem in the
industrialized cities of the North-East
where up to 70% of workers were
unemployed due to the collapse of the
ship-building industry.
The severe economic depression in Germany, still paying war reparations after the First
World War, had a profound effect on the population. Angry and frustrated, Germans
supported the militarist Nazi government of Adolf Hitler. Hitler introduced a large-scale
work creation program and reduced unemployment significantly by the mid 1930s.
Germany invested heavily in rearmament and the manufacture of machinery. On the other
side of the world, Japan invaded Manchuria and established industries and mining there to
help stimulate economic growth for Japan. The militarist governments of both Japan and
Germany began to have more aggressive policies which, eventually, led to the Second
World War.
In the United States, the lasting effects of the Great Depression were the New Deal
programs introduced by President Franklin D. Roosevelt. The industry and agricultural
sectors received the most support with work-creation schemes having high priority. The US
government became much more closely involved in social concerns and laid the
foundation for the larger role of the Federal government in both the economic and welfare
areas. There was an upheaval in United States politics as well with farmers, labor unions
and ethnic minorities giving more support to Roosevelt’s Democratic Party. The Great
Depression ended in 1939 as the world increased the production of war materials with the
outbreak of the Second World War. War production increased jobs and hence large
amounts of money were reintroduced to circulate in the economy.

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