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THE CRISIS OF 1929 AND THE GREAT DEPRESSION - Coggle Diagram
THE CRISIS OF 1929 AND THE GREAT DEPRESSION
An abrupt end to prosperity
During the euphoria
of the Roaring Twenties
much of the boom in the US economy
based on massive financial growth
The
Company profits
Savings
of many middle-class families
invested
in unprecedented speculative operations
on the stock market
They hoped to get rich
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As a result of intense speculation
New York Stock
main indicator of the world economy
was overvalued
A financial bubble
grew
quickly burst
On
24
29
October 1929
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panic spread
across the United States
Investors sold huge
amounts of shares
at a much lower price
priority was to get rid of shares
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This led to the
crash of the New York Stock Exchange
Companies lost their
Value
Capital
Savers saw their money disappear
transformed into unpayable debts
banks went bankrupt
as they could not collect money
ney for credit granted
Companies were no longer
given new credit
many companies had to
close down
fire their workers
Industrial production declined
a great deal
in a short period of time
This was the end
of the period of prosperity
of the short-lived Roaring Twenties
The repercussions of the economic crisis
were quickly felt
around the world
Many countries depended
on US loans
cancelled as a result of the crisis
This generalisation of the crisis
known as the Great Depression
Because of its
intentsity
duration
the worst crisis
had ever endured
the capitalist system
Its most acute phase
From 1930 to 1932
although the serious
economic
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politcal
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reach
Economic crises are a phenomenon
that are part of capitalist system
happen in cycles
At that time
consumption fell dramatically
there was much less business
main effect of crisis
increase in unemployment
millions of people
had no work
lived in poverty
This affected
almost all social classes
Many firms were ruined
workers
employees
the most affected
because unemployed workers
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technicians
Measures to overcome the great depression
This especially affected
industrialised countries
In Europe were:
Great Britain
Austria
which suffered
consequences similar to those
endured by the US economy
Germany
Countries and colonies
that exported raw materials
also suffered tis effects
as the industrial countries
who bought their products
no longer had
same purchasing power
The countries that saw
a drastic reduction
in their exports were
Chile
India
Argentina
Malaysia
Brazil
Australia
Although some joint measures
such as trade agreements
between countries
were attempted to overcome
the crisis
each country carried out
the solutions it considered
most appropriate
generally based on
economic nationalism
state intervention
Both strategies were embodied
by the main economic powers
of the time
The United States
in 1933
President Roosevelt proposed
a shock plan
known as the ‘New Deal’
to revive the economy
state intervention
which involved
promotion of public works
subsidies for firms
control of banking
more social welfare
Great Britain
despite having more than
3 million unemployed workers
state did not intervene
in the economy
restricted itself to devaluing
pound by 25%
