depression facts

The world witnessed a massive unemployment and economic downturn during the period from 1929 to 1933. This period of 12 years of economic crisis is termed as the Great Depression. There are many reasons attributed to this economic crisis.

the great depression facts

Economists blame the bleak banking methodology and the laissez-faire policies as reasons for such a drastic economic fall. The effects of the Great Depression are even felt today. It gave the entire globe such a solid jerk that even today economists view it as the most annoying and horrifying economic experience. In fact, the recent financial downturn that was felt all over the world was compared to a certain degree to the Great Depression. Once again, in this recent economic downturn, the banks were to be blamed.

The term 'Great Depression' was used by the then president of the US, Herbert Hoover, quite commonly in his speeches with reference to the economic crisis. This term formally found its acceptance in the book titled "The Great Depression' authored by the British economist Lionel Robbins. During the initial phases of the economic downturn, the US economy dropped by a massive 30 billion dollars. On one single day, termed as 'Black Tuesday', there was a total loss of a whopping 14 billions dollars.

Canada was badly hit by this economic slump. The economy of Canada fell by almost fifty-six percent from the level that was prevalent in the year 1929.

The unemployment rate was at its peak of twenty-seven percent in the year 1933. The problems of the economic crisis got further aggravated by the Smoot-Hawley Tariff Act, which affected the global trade and collapsed the economy of many other countries.

In the year 1930, the severe drought experienced in Texas, Oklahoma and the nearby Great Plains worsened the situation and forced as many as 500,000 people to flee and become unemployed. The average annual income dropped down to a mere 1,500 dollars from an earlier amount of 2,300 dollars. This was almost forty percent less than the previous figures.

The Great Depression even affected children, forcing about 3,000,000 to quit school and begin working so as to supplement the family's income.

The only positive aspect in favor of the US economy was the replacement of old economic liberal policies by the Keynesian policies.

According to reports, this period was a frightening one with numerous businesses and individuals going bankrupt. Businesses closed down and thousands and thousands of people were left with no source of income. These people were unable to provide for their families; and surely this must have been the most difficult thing for them to accept. The desperation felt by people during this period cannot be described in words.

the great depression facts