The decade-long global economic downturn, which became known as the Great Depression, began in the United States in 1929 after the Wall Street stock market crash. Although America had furthest to fall, the effects were felt everywhere.
What led to America’s financial fail?
After the Americans wrested their independence from Britain and went through their own civil war, the newly minted United States expanded to become the world’s most prosperous powerhouse.
As a cohesive nation, with few nearby competitors and vast natural resources, it was perhaps reasonable to assume that the former ‘colonies’ would overtake their European antecedents and become industrially and financially superior.
The might of the US was crucial to success for the Allies in World War I, but while the 1920s presented a new era of capitalist boom and personal freedom – even decadence – for many, the Wall Street Crash of 1929 brought a severe shock to the world.
Did the Wall Street Crash trigger the Great Depression?
The ‘Black Tuesday’ of 29 October 1929 remains the single greatest financial disaster in US history. From the excess of the ‘Roaring Twenties’, people suddenly found themselves with nothing.
Over night, the world confronted the kind of capitalistic fall from grace, which reminded the international stock exchange that boom can, and will, lead to bust.
The Crash, however, wasn’t the single cause of the depression. In fact, financial recovery looked hopeful for some time after. In a few months, the markets rallied to early 1929 levels. Yet fear had spread among consumers and investors, and with no upswing of confidence to be found, further storms lay ahead.
How was it different to other capitalist failures?
In America at least, a more traditional source of suffering coincided with the financial situation.
A great drought gripped the American heartlands, displacing hundreds of thousands of people, forced to travel to find work.
National unemployment levels reached 20 per cent at the height of the economic struggle, and even families with work saw their income drop by an average of 40 per cent.
Shanty towns rose in the most stricken areas, soon being labelled ‘Hoovervilles’, after the President under whose watch the crisis had happened.
And presumably it was no better over in Britain?
It was the North of England, and industrial centres across Britain, that were hardest hit. It resulted in the Jarrow March of 1936, in which 200 impoverished shipbuilders and other industrial workers marched nearly 300 miles to present a petition to Westminster to reopen the shipyards, with a crushing lack of success.
As many European countries were in debt from World War I, the international financial crisis proved sluggish in recovery. Improvements were only evident by the end of the decade, just in time for another expensive World War to break out.
When did commerce recover?
There was no magic solution to the depression, but a series of schemes in each country were designed to reverse the downturn. In America, Franklin Roosevelt, President since 1933, promoted his ‘New Deal’ as a call to arms for greater equality, geared towards the ‘Three Rs’ – relief, recovery and reform.
In truth, the US government was improvising, and no single central policy provided a cure for the sick economy. It was just, as in every country, a slow, painful grind, and modern economic recovery is no different.
Unemployment, starvation, and war. The Great Depression seems very well named…
As in all tragedies – be they localised or global, like the Great Depression – there does often tend to be an artistic response to look towards, at least.
American novelist John Steinbeck’s two great works Of Mice And Men and The Grapes Of Wrath were centrally themed around the experiences of American workers in the 1930s. Arguably the greatest hit record of the period was Brother, Can You Spare A Dime?, which was written in 1931 and popularised around the struggling world by Bing Crosby.