The Great Depression (sep 4, 1929 – mar 1, 1933)
Description:
During the 1930s much of the world faced harsh economic conditions. Many people were out of work, hungry, or homeless. This period is called the Great Depression.
CAUSES
One of the main causes of the great depression was the bank failures. During the 1930s, bank deposits were uninsured which resulted in people loosing their savings and over 9,000 banks failed. The surviving banks became unsure of their economic situation and stopped being willing to create new loans as they were unsure of the economic situation and concerned for their own
survival. This created an issue leading to a decrease of money sent.
While the drought that occurred wasn't a direct cause of the Great Depression, in 1930 the drought conditions in the
Mississippi Valley were so out of proportions that they had to sell their farms without profit in order to pay their taxes or other debts.
EFFECTS
The economy shrank 50% during the first five years of the depression, economic output was $105 billion, as measured by gross domestic product in 1929. That's the equivalent of $1.057 trillion today.
During 1928 unemployment was at 3.2% in making it less than the natural rate of unemployment. It had more than doubled to 8.7% in 1930 and then skyrocketed to 15.9% in 1931 and, in 1932, to 23.6%. By 1933, unemployment was 24.9%. Almost 15 million people were out of work.
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