President Trump’s warnings, and the imposition of new tariffs on several nations, have sparked conversations about the potential for economic turmoil reminiscent of the 1929 Great Depression. ‘The Great Depression,’ caused a sharp decline in global production, income, trade, and employment. This period of economic hardship saw widespread hunger, poverty, and business failures, leaving many at the mercy of the crisis.
The roots of this economic catastrophe can be traced back to the aftermath of World War I. The war disrupted the existing world order and the international financial system. The U.S. and Japan expanded their manufacturing capacity after the war, which led to oversupply and economic losses for manufacturers.
Agriculture also suffered. Technological advancements after the war led to increased crop yields, which resulted in a decline in grain prices on international markets. Farmers found themselves unable to recoup their production costs. To maintain their income, farmers increased production, exacerbating the price collapse and driving the agricultural sector towards financial ruin.
The ‘Black Tuesday’ stock market crash of October 24, 1929, was a pivotal event, with the New York Stock Exchange plummeting 50%, and corporate profits fell by over 90%. This event set off a chain reaction of economic failures.
The US’s post-war lending to European allies further intensified the economic crisis. The decision to stop lending in 1929 caused financial instability across numerous nations, contributing to the collapse of European banks. This further affected the value of currencies around the world, and also impacted Latin America.
As the Depression worsened, American banks ceased lending and started to recover debts. This severely impacted farmers, the middle class, and industrialists, plunging many into financial difficulties. Many families were unable to maintain their financial obligations, resulting in the repossession of homes and vehicles.
This economic downturn caused the closure of thousands of banks and over 100,000 businesses. This led to unemployment. The rate of unemployment skyrocketed from 1.6 million in 1929 to reach 14 million by 1933.
Malnutrition and starvation became rampant. In 1931, approximately 100 people died of starvation in New York hospitals, with countless more succumbing to diseases related to malnutrition. A lack of access to adequate medical care worsened the situation. In New York, a large portion of children suffered from malnutrition.
As a result, many Americans lost their homes. By 1932, more than 250,000 people were unable to meet their mortgage payments. Those who could not meet rent or mortgage obligations were evicted, resulting in people being forced to seek shelter on streets and in parks. Basic necessities became unaffordable.
Throughout several cities, shantytowns, known as ‘Hoovervilles,’ emerged, showing the public’s dissatisfaction with President Hoover. Desperate individuals resorted to extreme measures, including intentionally getting arrested to secure essentials like shelter and food.
The Great Depression, lasted for over a decade, with conditions gradually improving by 1939. The advent and expansion of World War II stimulated production, provided employment for women, and led to the recruitment of unemployed men, ultimately bringing an end to the depression.
