The Great Depression was an economic slump in North America, Europe and other industrialized areas of the world that began in 1929 and lasted until about 1939. It was the longest and most [[#|severe depression]] ever experienced by the industrialized Western world. The stock market crash alone did not cause the Great Depression but it quickened the collapse of the economy and made the Depression much more difficult. By 1932 factory production had been cut in half. Thousands of businesses failed and many banks closed. Around 9 million people lost the money in their savings accounts when banks could not pay the people back. Many farmers lost their land since they could not pay their [[#|mortgage payments]]. By 1933, one-fourth of all American workers were unemployed.
Charles Gates Dawes (August 27, 1865-April 23, 1951) pursued two careers during his lifetime, one in business and finance, the other in public service. He was at the height of his fame in both in 1926 when he was awarded the Nobel Peace Prize for 1925. He was the vice-president of the United States; he had achieved worldwide recognition for his report on German reparations in 1924; he had a secure reputation as a financier.


Before World War I Germany was a prosperous country, with a industrious economy, and world leaderships in chemicals, and machinery. German money all had about the same value and all were exchanged four to five to the dollar however that was in 1914. By 1923, the exchange rate between dollar and the Mark, was one trillion Marks to one dollar. A wheelbarrow full of money could not buy one newspaper. In Germany, prices doubled between 1914 to 1919. After four hard years Germany lost the war, under the Treaty of Versailles they were forced to make 33,000,000 in reparations. The Weimar Republic was fragile. The Weimar Republic was categorized as a weak democracy, there were many reasons for saying this but there were three main reasons for the Weimar Republic being weak. Germany lacked a strong democratic tradition, the Weimar Republic's paper money steadily lost its value(heavy inflation), and millions of Germans blamed the Weimar government not their wartime leaders for their country's defeat and postwar humiliation. Germany recovered from the 1923 inflation thanks largely to the work of an international committee. Charles Dawe, an american banker was the head of the committee. The Dawes Plan provided for a 200 million dollar loan from American banks to strengthen Germany's economy and to stabilize Germany's currency.


All of the countries involved in the Great Depression, responded differently with it. The one thing that they all did have in common was that all of the countries had to change themselves to get over the Depression. Britain decided to elect a National Government. The National Government then passed high tariffs, increased taxes,regulated the currency, and lowered interest rates, so they could encourage industrial growth. This helped Britain a lot. France responded differently because they had a more self-sufficient economy. The problems with the economy affected their political instability. France created many governments that ended up falling, eventually The Popular Front was created and they passed many reforms to try to help workers. This ended up not helping much, wage gains were offset because of price increases, so the unemployment was still high. France still decided to stick with a democratic government. The United states responded by electing Franklin D. Roosevelt. Roosevelt created a plan for government reform and called it the New Deal. In this they had lots of public works projects done to help people get jobs and they had government agencies help and give money to businesses and farms. The New Deal did end up helping the United States and reforming their economic system. Lastly, Germanys Foreign Minister had responded by working to restore their economy and to have the republic stabilized. He ended up dying while trying to do this and this lead to Hitler, who had know that his time to try and rule would be coming. The political parties agreed to have an election, and everyone was ready for change and to become stronger. These reasons led to Hitler and the Nazis. Overall all of the countries responded to the Great Depression differently, but eventually the countries got over it.


It all started with World War I. It left every main European country bankrupt. Germany had some major problems with the depression. For one they didn’t increase taxes during the war so they had no money to pay war debts. What was their solution? They just simply printed more money. With this action the money lost all of its value causing inflation so with some sharp thinking they decided to print even more money leading to severe inflation. So for an example a loaf of bread in 1918 costs just under a mark. By 1923 it was about 200 billion. The United States wasn’t immune to this depression either. The economy had many huge flaws such as the uneven distribution of wealth, overproduction of business and agriculture, and Americans were simply just buying less. Uneven distribution of wealth was very evident. Sixty percent of American families were earning less than 2,000 dollars a year while the richest 5 percent brought in 33 percent of U.S. income. With all of this poverty in the U.S. at this time most families were too poor to buy common goods or at least not many. When nobody is buying anything, factory production goes down. Owners cut down on orders from the factories reducing the amount of work need to be done. This meant lay offs. When even more people would enter the unemployment train it didn’t help poverty in the U.S. Another effect of nobody buying goods is the overproduction. This would bring the value down of the goods hurting farmers financially. Without any money the farmers couldn’t pay back the banks loans running the banks out of business. It’s hard to believe with all of this going on in the united states people still bet in the stock markets… The soaring stocks made it seem like the middle class and even the lower class could afford to bet in the stock market. This was quite a problem. On October 24, 1929 the stock prices went straight down. Everyone tried to sell their stocks as soon as they could but couldn’t find anyone to buy. This was the collapse of the stock market. The stocks were now worth nothing. This caused even more unemployment and for the lucky people who still had jobs their production and salaries both went down. Businesses and banks would close. Right around 9 million people lost their entire savings accounts and the banks simply couldn’t pay them back. Farmers lost their farms and by 1933 one third of America was jobless. This didn’t just hurt the United States. Many countries relied on their economy and with that in the toilet all of these other countries’ economic problems grew too. Congress raised high tariffs on trade with these other countries hurting them. This forced other countries to raise tariffs also causing trade to drop to 65 percent leading to even more unemployment. The great depression was an ugly time in world history.
Men at the unemployment bureau auctioning off jobs.


The Great Depression affected everyone in the United States involving stock markets, production, and employment. By 1932 the stock market in the United States had continued to fall and dropped about 20 percent. People who were holding stocks and portfolios caused 11000 of the 25000 banks in America had failed. The fail of so many banks caused the people to lose confidence in the economy, which led to reduce production. The supply and demand for products decreased rapidly. Once the production of good decreased the result was a drastic rise of unemployment to between 12 and 15 million workers, or 25-30 percent of the work force. After all that had happened with America everyone else became just as frightened, because of what America was taking and doing. America was demanding repayment of their overseas loans, and American investors withdrew their money from Europe. United States conditions only got worse. Many countries that depended on exporting goods to the United States also suffered. When the United States raised tariffs, it set off a chain reaction. Other nations imposed their own higher tariffs. World trade dropped by 65 percent, which caused the economic downturn. Unemployment rates soared.
This map shows how the Great Depresion effected the United States

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