The Great Depression of 1929 : Economic Shock to the World

 

 

The Great Depression of 1929

 Economic Shock to the World

The Great Depression of 1929 is one of the worst economic problems faced by the western economies in particular and world in general. It started in 1929 and according to experts lasted up to 1939. The economy of United States of America (USA)  was severely affected by the Great Depression. It would not be an exaggeration if we say that it destroyed an era of prosperity which was existing in America in 1920s and reversed the economic development of USA.

The effects of Great Depression were quite fast and very negative. It brought severe miseries and poverty for lots of people in America. Many Americans lost their jobs and become unemployed during the Great Depression. Some economists say that there were abundant goods available in the market but the purchasing power of the people had decreased. People were desperate to sell their belongings like cars and homes but there were no buyers as most of the Americans had become penniless.

The 1920s set in unprecedented economic prosperity in United States of America. The Republican Party was successful in sending its representative in White House when Warren G. Harding won the Presidential elections in 1920. Harding was a Republican from the state of Ohio. He remained President from 1921 to 1923. During his tenure there were quite a few scandals including Teapot Dome scandal. But, it is said that he was sympathetic towards the condition of minorities and women. He was also open for accepting new technologies.

The slogan of Warren Harding during Presidential Election Campaign was ‘Return to normalcy’  and he believed in the philosophy of ‘Less government in business and more business in government’. In spite of scandals prosperity returned to America after First World War during Harding years. He died in 1923 in the Californian city of San Francisco and his Vice President Calvin Coolidge became the President as per the provisions in the United States Constitution.

Calvin  Coolidge was born in Plymouth in the state of Vermont located on eastern coast of United States. He went on to become the Governor of the state of Massachusetts. During his tenure Americans witnessed spectacular prosperity. His popularity was quite high in 1924, hence, he got elected as the President of the United States in that year. His statements like ‘The man who builds a factory builds a temple, that the man who works there worships there and to each is due, not scorn and blame, but reverence and praise’ inspired the Americans further who worked hard and accelerated the economic property. The hallmark features of Coolidge Presidency were tax cuts, strong economic growth, increase in wages, decreasing unemployment and inflation.  Thus, Americans had jobs and more money to buy things including car.

In 1928 Calvin Coolidge chose not to run for the Presidency, hence, his Secretary of Commerce Herbert Clark Hoover was nominated as the Republican nominee during Presidential Elections. Herbert Hoover was born in Iowa but spent his constructive years in Oregon. He was engineer by training.

Before becoming the US President Hoover had contributed in various capacities. He was in London when Germany declared war on France in 1914. Hence, he had to carry out the great responsibility of taking out the tourists from Europe which was under the cloud of war. President Woodrow Wilson gave a responsibility of ensuring the steady availability of food to the Americans and their allies during the First World War by appointing him as the In-charge of Food Administration. Hoover proved to be an excellent administrator in this capacity and took care that the food needs of both American people and overseas friends of United States of America were taken care properly. One of the fantastic examples of extending help to enemies as well on humanitarian ground is that Hoover saw to it that the Soviet Russia gets help in 1921 even though Russians and Americans shared opposite ideologies. At that point of time he had taken the stand that irrespective of political differences one should not allow twenty million people to starve.

Hoover served as Secretary of Commerce for both Warren Harding and Calvin Coolidge and thus played crucial role in bringing prosperity in the lives of Americans. But, it is irony of history that when he himself became the President the whole edifice of prosperity and economic development came down crushing when Stock Market started collapsing in 1929.

The Great Depression of 1929 as mentioned above resulted into increase in unemployment, starving, steep decline in Gross Domestic Product (GDP), many banks lost their deposits, lots of factories were closed down and mines were abandoned. Americans faced extreme difficulties during the Great Depression. It is said that even people were searching for food in garbage beans. People were ready to sell their houses and cars for raising money but there were no buyers. It not only affected the American economy but the Europe and other parts of the world also experienced the effects of this great economic shock directly or indirectly.

Ultimately, in the Presidential Elections of 1932 Herbert Hoover was defeated badly by Democratic Party nominee Franklin D. Roosevelt.

Franklin Roosevelt brought the economy of USA back on track with the help of his New Deal Policy.