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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
much of the boom in the US economy was based on massive financial growth
many middle-class families were invested in unprecedented speculative operations
They hoped to get rich in a short period of time
buying and reselling stocks that were continually rising in value
there was an increase in credit operations without sufficient repayment guarantees
New York Stock Exchange, the main indicator of the world economy, was overvalued
financial bubble grew and quickly burst
24 and 29 October 1929, Black Thursday and Tuesday, the share price fell sharply
Investors sold huge amounts of shares at a much lower price than the original
This led to the crash of the New York Stock Exchange.
repercussions of the economic crisis were quickly felt around the world
Many countries depended on US loans
cancelled as a result of the crisis and its effects
generalisation of the crisis is known as the Great Depression
Because of its intensity, duration and reach, this was the worst crisis the capitalist system had ever endured.
Industrial production declined a great deal in a short period
was the end of the period of prosperity and of the short-lived Roaring Twenties
Economic crises are a phenomenon that are part of the capitalist system and happen in cycles
DOROTHEA LANGE (1895–1965)
MEASURES TO OVERCOME THE GREAT DEPRESSION
Great Depression especially affected industrialised countries
Countries and colonies that exported raw materials also suffered the effects of the Great Depression
Industrial countries who bought their products no longer had the same purchasing power
embodied by the main economic powers of the time
Great Britain
state did not intervene in the economy and restricted itself to devaluing the pound by 25%
In the United States
President Roosevelt proposed a shock plan, known as the ‘New Deal
revive the economy
proposed state intervention
involved the promotion of public works, subsidies for firms, the control of banking and more social welfare.
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
they were based on economic nationalism and state intervention in the economy
