THE GREAT DEPRESSION

BYHARSH RAJPUT

ACKNOWLEDGEMENTI would like to thank my subject

teacher Sunita Mam and my parents for helping me in making this

presentation. My parents helped me in formatting the matter of the

presentation. I collected the information from the internet and

from some books.My other gratitude I would like to convey to my school

which suggest me to make this presentation and to have marks for

adding it into examination.

• THE GREAT DEPRESSION– THE COMING OF DEPRESSION– THE BEGINNING– CAUSES OF GREAT DEPRESSION

Banks failure. Decline of international trade. Overproduction of agricultural goods. Over production of industrial goods. Decline of farming industry. Unequal distribution of wealth.

– RESULTS OF GREAT DEPRESSION Nations economy crashed. Farmers struggled a lot. Rising price resulted in declining of consumers. Gap between rich and poor widened. Banks failed. Gross National Product decreased, Unemployment increased. Hardship, homelessness increased.

– WORLD WIDE EFFECTS AUSTRALIA EAST ASIA FRANCE GERMANY INDIA LATIN AMERICA USA

• GREAT DEPRESSION IN USA– CAUSES OF GREAT DEPRESSION IN USA– EFFECTS OF GREAT DEPRESSION ON USA

• GREAT DEPRESSION IN INDIA– EVENTS RELATED TO GREAT DEPRESSION

Declaration of independence Salt satyagraha

CONTENT

THE GREAT DEPRESSION

The Great Depression was a severe worldwide economic depression in the decade preceding

World War II . The timing of the Great Depression varied across nations, but in most countries it

started in 1930 and lasted until the late 1930s or middle 1940s. It was the longest, deepest, and

most widespread depression of the 20th century. In the 21st century, the Great Depression is

commonly used as an example of how far the world's economy can decline. The depression

originated in the U.S., after the fall in stock prices that began around September 4, 1929, and

became worldwide news with the stock market crash of October 29, 1929.

THE COMING OF DEPRESSIONDuring the 1920s, many Americans enjoyed what seemed like an endless era of prosperity. But in 1929, the stock market crashed.

World wars loans.

Declining trade.

Production fell, unemployment rose, and the economy went into a period of dramatic decline.

Years after the Great Depression began, periodic contraction was seen as part of the business cycle.Economic historians usually attribute the start of the Great Depression to the sudden devastating collapse of US stock market prices on October 29, 1929, known as Black Tuesday.By mid-1930, interest rates had dropped to low levels, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed.By May 1930, automobile sales had declined to below the levels of 1928. Prices in general began to decline, although wages held steady in 1930; but then a deflationary spiral started in 1931. Conditions were worse in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs.

THE BEGINNINGThe economic contraction that

began with the Great Crash triggered the most severe economic downturn in the nation’s history—the Great

Depression. In the beginning in mid-1930, a severe drought

ravaged the agricultural heartland of the US. The Great Depression lasted from 1929

until the United States entered World War II in 1941. The stock market crash of 1929 did not cause the Great Depression. Rather, both the Great Crash and the Depression were the

result of deep underlying problems with the country’s

economy.

Together, government and business spent more in the first half of 1930 than in the corresponding period of the previous year. Consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures

CAUSES OF GREAT DEPRESSION

Banks failure.

Decline of international

trade.

Overproduction of

agricultural goods.Over

production of industrial

goods.

Decline of farming industry.

Unequal distribution of wealth.

INTERNATIONAL TRADE DECLINED

European demand for goods declinesFactories producing morePersonal income , tax, revenue, profits

and prices dropped.International trade plunged by more

than 50%.Interest rates dropped to low levels

BANKING INDUSTRY COLLAPSED

Families lose savings in crash; banks have little cash left on reserve.

Banks lose money loaned to ‘buy on the margin’ (even people who did not invest lost out!).

People default on mortgages due to unemployment.

European nations could not repay their debts.

America would not forgive the loans.

Banks begin to fail.

Overproduction of Agricultural Goods

American farmers had prospered during World War I

Use profits to buy machines to produce more

After World War I, demand drops surplus!

Huge supply + Low demand = Low prices

FARMING INDUSTRY DECLINE

Farmers borrowed from bank to buy machinery

Foreclosed on mortgages and other debts

Banks closed due to defaults and stock market

Between 1929 and 1933 farmers’ income 50%

Farmers in dept.One million families lose

their farms by 1934Many people too poor to

buy goods to lift economy

Overproduction of Industrial Goods

oTechnological advances change how Americans live and work

o In the Roaring 1920s:• Consumer demand is

very high• Machine produce quality

products quickly• Unrestricted capitalism

oBy 1929, supply greatly exceeds demand!

UNEQUAL DISTRIBUTION OF WEALTH

• Gap between the rich and poor widens in the 1920s

• By 1929 some Americans have more wealth

• Wages increased• The income of rich increased• Wealth does not trickle down• Consumers in debt ; Cannot afford

products

EFFECTS OF GREAT DEPRESSION

The Great Depression had devastating effects in countries rich and poor . Personal income ,

tax, revenue, profits and prices dropped, while international trade plunged by more

than 50%. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%. Cities all around the world were hit

hard, especially those dependent on heavy industry. Construction was virtually halted in

many Countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few

alternate sources of jobs, areas dependent on primary sector industries such as cash

cropping, mining and logging suffered the most. Some economies started to recover by

the mid-1930s. In many countries, the negative effects of the Great Depression lasted until after the end of World War II.

RESULTS OF GREAT DEPRESSION

Banks failed.

Nations economy crashed.

Farmers struggled a lot.

Rising price resulted in declining of consumers.

Gap between rich and poor widened.

Gross National Product decreased, Unemployment increased.

Hardship, homelessness increased.

THE NATION’S SICK ECONOMY

Housing Railroads Textiles Mining Steel Agriculture Automobiles Consumer goods

As the 1920s advanced, serious problems threatened the economy while

Important industries struggled, including :

FARMERS STRUGGLE

◊ No industry suffered as much as agriculture

◊ During World War I European demand for American crops soared

◊ After the war demand plummeted

◊ Farmers increased production sending prices further downward

CONSUMER SPENDING DOWN

‼ By the late 1920s, American consumers were buying less

‼ Rising prices, stagnant wages and overbuying on credit were to blame

‼ Most people did not have the money to buy the flood of goods factories produced

GAP BETWEEN RICH & POOR

‡ The gap between rich and poor widened

‡ The wealthiest 1% saw their income rise 75%

‡ The rest of the population saw an increase of only 9%

‡ More than 70% of American families earned less than $2500 per year

FINANCIAL COLLAPSE◊ After the crash,

many Americans panicked and withdrew their money from banks

◊ Banks had invested in the Stock Market and lost money

◊ In 1929- 600 banks fail

◊ By 1933 – 11,000 of the 25,000 banks nationwide had collapsed

GNP DROPS, UNEMPLOYMENT SOARS

† Between 1928-1932, the U.S. Gross National Product (GNP) – the total output of a nation’s goods & services – fell nearly 50% from $104 billion to $59 billion

† 90,000 businesses went bankrupt

† Unemployment leaped from 3% in 1929 to 25% in 1933

HARDSHIPS, HOMELESSNESS INCREASED

The Great Depression brought hardship, homelessness, and hunger to millions

Across the country, people lost their jobs, and their homes

Some built makeshifts shacks out of scrap material

WORLD WIDE EFFECTS

AUSTRALIA

EAST ASIA

FRANCE

GERMANY

INDIA

LATIN AMERICA

USA

¤ Australia's extreme dependence on agricultural and industrial exports meant it was one of the hardest-hit countries in the Western world

¤ Falling export demand and commodity prices placed massive downward pressures on wages

¤ Further, unemployment reached a record high of almost 32% in 1932

¤ After 1932, an increase in wool and meat prices led to a gradual recovery

AUSTRALIA

East Asia

The Great Depression in East

Asia was of minor impact

The Japanese economy shrank

by 8% 1929–31

The invasion and subjugation of

Manchuria into a Japanese

puppet-state in September

1931, thus providing Japan with

raw materials and energy, the

Japanese economy was able to

recover by 1932 and continued

to grow.

FRANCE The Depression began to

affect France from about

1931

France's relatively high

degree of self-sufficiency

meant the damage was

considerably less than in

nations like Germany

Hardship and

unemployment were high

enough to lead to rioting

and the rise of the

socialist Popular Front.

Germany† Germany's Weimar Republic

was hit hard by the depression, as American loans to help rebuild the German economy stopped.

† Unemployment soared, especially in larger cities, and the political system veered toward extremism.

† Hitler's Nazi Party came to power in January 1933. In 1934 the economy was still not balanced enough for Germany to work on its own.

INDIA‡ Decline of

international trade resulted the obtaining of low revenue.

‡ Indian gold reserves sold off.

‡ Uninhibited increase in land rent.

‡ Value of the agricultural produce came down to alarming levels.

‡ Heavy losses resulted the farmers to sell off their valuables in order to pay the land rent and other taxes.

‡ This resulted the farmers in dept.

LATIN AMERICA

Because of high levels of United States

investment in Latin American

economies, they were severely

damaged by the Depression

Chile, Bolivia and Peru were

particularly badly affected

One result of the Depression in this

area was the rise of fascist movements.

USA§ About 13 million

people became unemployed

§ In the early 1930s, more people emigrated from the United States than immigrated to it

§ From 1929 to 1932, about 5,000 banks went out of business.

§ Many people suffered from diseases.

§ US GDP and stock market declined.

GREAT DEPRESSION IN USA

GREAT DEPRESSION IN USA The Great Depression began in August of 1929, when the

United States economy first went into an economic recession . Although the country spent two months with declining GDP, it was not until the Wall Street Crash of October, 1929 that the effects of a declining economy were felt, and a major worldwide economic downturn ensued. The market crash marked the beginning of a decade of high unemployment, poverty, low profits, deflation , plunging farm incomes, and

lost opportunities for economic growth and personal advancement. include numerous factors, especially high

consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, and the lack of

high- growth new industries, all interacting to create a downward economic spiral of reduced spending, falling

confidence, and lowered production. Industries that suffered the most included construction, agriculture as dust-bowl

conditions persisted in the agricultural heartland, shipping, mining, and logging as well as durable goods like

automobiles and appliances that could be postponed. The Depression caused major political changes in America. The

Depression also resulted in an increase of emigration of people to other countries for the first time in American

history.

CAUSES OF GREAT DEPRESSION IN USA

Banks began to fail in October 1930 when farmers defaulted on loans.

There was no federal deposit insurance during that time as bank

failures were considered quite common. This caused the money

supply to shrink and the economy to contract and a significant decrease

in aggregate investment. The decreased money supply further

aggravated price deflation, putting further pressure on already

struggling businesses High interest rates needed to be maintained, in

order to attract international investors who bought foreign assets with gold. However, the high interest

also inhibited domestic business borrowing. All this resulted in the

introduction of the Great Depression.

EFFECTS OF GREAT DEPRESION ON USA

13 million people became unemployed. Many people belonged to families with no regular full-time wage

earner. Industrial production fell by nearly 45% between 1929 and 1932. Homebuilding dropped by

80% between the years 1929 and 1932. About 11,000 of the US’ banks had failed. U.S. GDP fell around

30%, the stock market lost almost 90% of its value. The unemployment rate fell down to about 3%. In 1933, 25% of all workers and 37% of all nonfarm

workers were unemployed. Over one million families lost their farms between 1930 and 1934. Corporate profits had dropped from $10 billion in 1929 to $1

billion in 1932. Between 1929 and 1932, the income of the average American family was reduced by 40%. About nine million savings accounts had been wiped out between 1930 and 1933. Over 273,000 families

had been evicted from their homes in There were two million homeless people migrating around the

country. Over 60% of Americans were categorized as poor by the federal government in 1933. In the early

1930s, more people emigrated from the United States than immigrated to it. Many people became ill with

diseases such as tuberculosis.

GREAT DEPRESSION IN INDIA

GREAT DEPRESSION IN INDIA

The Great Depression of 1929 had a very severe impact on India, which was then under the rule of the British

Raj . The Government of British India adopted a protective trade policy which, though beneficial to the United Kingdom, caused great damage to the Indian economy. During the period 1929–1937, exports and

imports fell drastically crippling seaborne international trade. The railways and the agricultural

sector were the most affected. The international financial crisis combined with detrimental policies

adopted by the Government of India resulted in soaring prices of commodities. High prices along with

the stringent taxes prevalent in British India had a dreadful impact on most Indians. The discontent of

farmers manifested itself in rebellions and riots. The Salt Satyagraha of 1930 was None of the measures undertaken as a response to heavy taxation during

the Great Depression. The Great Depression and the economic policies of the Government of British India

worsened already deteriorating Indo-British relations. When the first general elections were held according

to the Government of India Act 1935 , anti-British feelings resulted in the pro-independence Indian

National Congress winning in most provinces with a very high percentage of the vote share.

EVENTS RELATED TO THE GREAT DEPRESSION IN INDIA

Declaration of independence

Salt satyagraha

DECLARATION OF INDEPENDENCE

On December 31, 1929, at a session of the Indian National Congress held on the banks of the river Ravi in Lahore, Jawaharlal Nehru unfurled the tricolor and declared that complete independence from British rule would, henceforth, be the goal of the Congress. This was a remarkable shift of policy for the Indian National Congress as it had, till now, been a staunch advocate of dominion status. This declaration also triggered the Civil Disobedience Movement , which commenced with the Salt Satyagraha.

SALT SATYAGRAHA The Salt Satyagraha formed the highpoint of

the Civil Disobedience Movement. While the heavy salt tax was always a burden to the poor

peasant, the widespread poverty during the Great Depression made it even more difficult for the commoner to procure salt. In response to this tax, between March 12, 1930 and April 5,

1930, Mahatma Gandhi marched with over 30,000 followers to the coastal town of Dandi in Gujarat , where they illegally manufactured salt and defied the Government monopoly on salt.

Subsequently, similar satyagrahas were organized at Dharasana and Vedaranyam. The

Government responded with a massive roundup, but by then, the march and the media

coverage had radically molded international opinion.

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