Europe and the Big Depression

Europe and the Big Depression were all the consequences that the Second World War had on Europe. There were many consequences; banks failed, industry struggled and trade was very scarce. Another country which was also affected badly, that in 1932 had over 6 million people unemployed, was Germany, as they had been relying on the US loans. Dictatorships and totalitarian regimes appeared, because the Germans were blaming the democracy for this crisis. These caused a new period to start, called a new period of territorial expansion which the League of Nations couldn't control, for example Italy in Abyssinia, Germany in Poland...)

The country which was affected the least was the USSR, as they had a communist system.

“New Deal”

             The “New Deal” was the measures taken to try and end with the economic crisis. John Maynard Keynes, an English economist, decided that the state should take place in the economy, either developing the public sector or the economic legislation. These ideas were put to practice thanks to Franklin Roosevelt, though he had three main ideas to end with this, they were:

1.      1. To spend money: He had the state investing money on infrastructure, to create more jobs.

2.      2. To rebuild US trade and industry: He shut down the banks that were out of money and gave the ones which still had money, more so that they could trade.

3.      3. To improve the lives of ordinary people.

All of this was known as the “New Deal”.

The Great Depression

The Great Depression  was a huge economic disaster which went from 1929-1934, causing hardship all over Europe, the United States and in the overseas empires. There were decrease of prices; low production of goods and unemployment increased. In 1929 the USA, stopped lending money and asked for all the loan money back. In 1930 banks closed and firms went out of business. This was really noticed in the USA, three years later, as there were over 12 million people unemployed.

"Black Thursday"

"Black Thursday" was the name given to the 24th of October 1929, a day when businesses all over the U.S.A collapsed, leaving thousands of people ruined. This disaster was caused by the "Wall Street Crash" which took place in New York in 1929. As people were running out of money and they could see that the prices for the shares were coming down, in September, they started to rush to sell their shares so not to lose too much money on them. The poblem was that no one wanted to buy shares because the prices of the shares were going down very quickly. People hoped that maybe the banks would buy thier shares and keep the high value of it, but they couldn't as they were also short of money.

The origins of the financial crisis

      The origins of the financial crisis began in 1919. They were caused because the Americans had over-produced, consequently there was too much supply and not enough demand. As they couldn’t sell their products, they weren’t receiving money, so people such as farmers couldn’t buy. This crisis ended in 1929.

1920's decade

              1920’S decade featured economic and for many people, care free living. This decade began with a roar and ended with a big crash, giving it the name “the booming twenties and the financial crash”.

After the First World War the economy was stagnant in Europe and America. Europe had a great dependency on America, as they provided Europe with cheap credit. After the war all the countries had to pay the money back to America, but Germany had to pay much more, for the reparations of the warThis war benefited the U.S.A, as it increased industrial production and gave American firms new markets lost by the Europeans. As it also benefited the government, they increased salaries; wealthy people taxes were cut, so that way they had more money, being able to invest it... This was known as the “Booming Twenties”

Soon after that, their luck came to an end. Nearly half of the American population were forced to live below the poverty line. Duties on products were a must, to try and protect them from U.S. imports. As the companies in the U.S were doing really well people started to borrow money to buy lots of shares. Europeans depended on U.S. loans. This was known as the “financial crash”