the great depression

what happened to banks, etc

• banks were closed

• many people lost life savings

• world trade dropped significantly

• businesses closed

• unemployment soared

• vacant factories, soup kitches, bread lines, shantytowns, and beggars became common symbols

by the end of the 1920s

• booming economy

• its farms and factories were producing more goods than could be sold

• roaring 20s

stock market crashed

• stock market frenzy had driven stock prices to an unsustainable level- until the stock market prices crashed, leading to panic selling, meaning billions of dollars in “paper wealth” were lost in a matter of days

countries/colonies connected to the US economy

• since europe was directly tied in to the united states through trade, debt, and investment, their economy suffered greatly too

• all the colonies watched demand for their primary export drop dramatically as sales in the US and europe were cut in half

• this generated widespread unemployment and social tensions in colonies

government response to these problems

• in response to these problems, governments steered their economies away from exports and toward producing for their internal market

• world trade essentially stopped

soviet union shines

• this economic catastophe suggested that capitalism was failing, as marx had predicted

• the USSR’s dispossesion of the propertied classes and state controlled economy had generated impressive economic growth

• almost no umeployment

• none of the countries opted for dictatorial socialism (like in the soviet union), but democratic socialism that sought greater regulation of the economy and more equal distribution of wealth was popularized

franklin roosvelt’s efforts

• the new deal: immediate programs of public spending (for dams, highways, bridges, and parks)

• longer terms reforms, like the social security system, the minimum wage, relief and welfare programs, and support for labor unions

• there was now some federal regulation and supervision of the economy

• ultimately, none of the new deals programs worked very well to end the great depression

how the us was able to heave themselves out of the great depression

• the thing that pulled the us out of the great depression was the massive government spending require by ww2

• they had to restart factories, employ paid defense jobs, and more or less get people doing work to help the war effort, and they ended up getting paid to do so