Industry - The Great Depression, 1929-1933 - CCEA - GCSE History Revision - CCEA - BBC Bitesize (2024)

FAQs

How did the Great Depression affect industry? ›

Factories were shut down, farms and homes were lost to foreclosure, mills and mines were abandoned, and people went hungry. The resulting lower incomes meant the further inability of the people to spend or to save their way out of the crisis, thus perpetuating the economic slowdown in a seemingly never-ending cycle.

The downturn hit bottom in March 1933, when the commercial banking system collapsed and President Roosevelt declared a national banking holiday. Sweeping reforms of the financial system accompanied the economic recovery, which was interrupted by a double-dip recession in 1937.

The underlying weaknesses in the US economy and the impact of the 1929 Wall Street Crash rapidly led to the Great Depression. In contrast to the boom of the 1920s, the 1930s was, for many people, a decade of hardship, poverty and desperation.

The panics caused a dramatic rise in the amount of currency people wished to hold relative to their bank deposits. This rise in the currency-to-deposit ratio was a key reason why the money supply in the United States declined 31 percent between 1929 and 1933.

As consumer confidence vanished in the wake of the stock market crash, the downturn in spending and investment led factories and other businesses to slow down production and begin firing their workers. For those who were lucky enough to remain employed, wages fell and buying power decreased.

The US economic sector hit hardest by the Great Depression was the banking and finance sector. The Great Depression, which began in 1929 and lasted until the late 1930s, was a severe worldwide economic depression that had devastating effects on many sectors of the US economy.

Not everyone, however, lost money during the worst economic downturn in American history. Business titans such as William Boeing and Walter Chrysler actually grew their fortunes during the Great Depression.

From 17 April 1930 until 8 July 1932, the market lost 89% of its value. Despite the crash, the worst of the crisis did not reverberate around the world until after 1929. The crisis hit panic levels again in December 1930, with a bank run on the Bank of United States (privately run, no relation to the government).

The unprecedented crisis of 2008 posed a very serious threat to the global economy, but it did not produce results anywhere near as bad as those of the Great Depression, which created a high of 25% unemployment. During the Great Recession, the unemployment rate's peak was 8.5%.

Mobilizing the economy for world war finally cured the depression. Millions of men and women joined the armed forces, and even larger numbers went to work in well-paying defense jobs. World War Two affected the world and the United States profoundly; it continues to influence us even today.

What were the 3 real causes of the Great Depression? ›

The causes of the Great Depression included the stock market crash of 1929, bank failures, and a drought that lasted throughout the 1930s. During this time, the nation faced high unemployment, people lost their homes and possessions, and nearly half of American banks closed.

The Great Depression was an economic crisis of a magnitude never before seen in the United States. During this time, stock prices plummeted, 9,000 banks went out of business, 9 million savings accounts were wiped out, 86,000 businesses failed and wages decreased by an average of 60%.

By the summer of 1932, the Great Depression had begun to show signs of improvement, but many people in the United States still blamed President Hoover.

Two presidents served America during the Great Depression: President Herbert Hoover from 1929 to 1933, and President Franklin Delano Roosevelt (FDR) from 1933 - 1945. Under President Hoover, the Great Depression became worse. Under FDR, the Great Depression ended in 1941.

Many economists and historians believe that the Great Depression could have been avoided, or at least mitigated, with better policy decisions and quicker government actions. Some economic downturns were inevitable due to excessive stock market speculation and consumer overspending.

The Great Depression, which lasted from 1929 to the late 1930s, was a period of severe economic downturn and financial hardship in the United States. During this time, there were very few new skyscrapers built, mainly due to a lack of investment capital, as many banks and investors were struggling financially.

After nearly a decade of expansion in the 1920s, the US manufacturing sector contracted by more than 30 percent from 1929 to 1933 (Figure 1). At the same time, overall US gross domestic product fell by 28 percent and the national unemployment rate rose from 3 to 25 percent.

In the early 1930s prices dropped so low that many farmers went bankrupt and lost their farms. In some cases, the price of a bushel of corn fell to just eight or ten cents. Some farm families began burning corn rather than coal in their stoves because corn was cheaper.

Troubled industries - Factories were producing more than the people could afford to buy. With prices rising faster than salaries, many people cut back on their purchases. Also housing and automobile manufacturing were on the decline because most people who could afford houses and cars had already bought them.