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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
During the euphoria of the Roaring Twenties
Many middle-class families were invested
in unprecedented speculative operations on the stock market
They hoped to get rich in a short period of time
By buying and reselling stocks
that were continually rising in
value
the New York Stock Exchange
the main indicator of the world economy
Was overvalued
he share price fell sharply
the Black Thursday
Tuesday of October1929
Investors sold huge amounts of shares
at a much lower price than the original
Their priority was to get rid of shares
which were dropping in value
This led to the crash of the New York Stock Exchange.
Companies lost their value and their capital
Savers saw their money disappear
transformed into unpayable debts
Most banks went bankrupt as
they could not collect money for credit granted
This was the end of the period of prosperity and of the short
Many countries depended on US
loans that were cancelled
As a result of the crisis and its
effects
This generalisation of the crisis is known as the Great
Was the worst crisis the capitalist system had ever endured
Because of its intensity, duration and reach
MEASURES TO OVERCOME THE GREAT
DEPRESSION
The Great Depression
especially affected industrialised countries
Great Britain, Austria and Germany
Which suffered consequences
similar to those endured by the US economy
In the United States, in 1933,
President Roosevelt proposed a shock plan
Known as "New Deal" to revive the economy
He proposed state intervention
which involved
Promotion of public works,
Subsidies for firms
The control of banking and more social welfare
In Great Britain,
the state did not intervene in the economy
And restricted itself to devaluing the pound by 25%.
In exchange,
this favoured exports and invigorated the domestic market
Protectionism
Consists of establishing customs tariffs
to favour the country’s own industry.
