America was refused to be a part of Second World War when it broke out. During this era America achieved a growth in its economic field. But the world was thrown into an economic crisis in 1929, this is known as The Great Depression in 1929. This crisis had endured for a long period of time. Actually it existed from 1929-39. It was a sudden fall in the economic world of Western industrialised countries.
This economic catastrophe first appeared in America after the stock market crash occurred in October1929. Even though capitalism had achieved much, many people were afflicted by starvation.The production was increased during this age, but the people did not have the capacity to purchase. In the middle of the economic growth in America, most of the families were troubled by starvation. Later the decrease in consumption led to the decrease in production. Many banks were collapsed between 1929 and 1932. By 1933 the crisis had reached its zenith and millions of Americans were unemployed and most of the banks in the company has failed.
Even though the economic field of America was dismantled by this great depression, the remedial measures propagated by the American President Franklin D. Roosevelt provided a great relief to the economically depressed world. The crisis was actually originated in America, but it had made a huge impact on rest of the world. The impact world economic crisis reflected in our country also.
A number of peasants became lease holders. This crisis paved way for the fall of prices of farm products, increase in debts and interests, increase of unemployment, wage cut, poverty , etc. Half of the workers in tea and rubber plantations were reduced in response to this crisis.
There are many factors which led the world to the great depression. The most important reason was the unequal distribution of wealth during 1920s. This become a cause to the formation of a gap between the lifestyles and the consumer pattern in the lives of rich and poor. The industry was following the pattern of high productivity but low wages.
For making huge profits industry owners provide low wages. Without much savings, people cannot buy these products. For the smooth functioning of any economy, the demand supply balance have to be maintained. During the end of 1920s, there occurred an oversupply of products, but there did not have enough money for buying those products.The people needs to satisfy their needs and this urge led to the emergence of buy-now-pay-later system.
This was a very dangerous situation, where the people felt difficulty to pay their loans from their meagre income.The American economy was hugely relied upon luxury spending and investment from the rich. This could exist as long as the investors have confidence in their economy. In this era of corporate wealth, the agriculture was neglected.
The industries which emerged during this era were mainly the automobiles, radio industries, steel, glass, rubber tyres, petrol products, hotels , etc. By 1929 theAmerica’s agriculture was in ruin and the great difficulty faced by them during the great depression was starvation.A culture of speculation was become prominent in America during this year(1929).
People started to invest on the stock market in order to gain more profit, through this way the people can clear their old debts(loans from buy-now-pay-later system) in the absence of wages. This corporate share companies were not working appropriately and this speculative culture was not working on the basis of any fundamentals. Quickly the prices of shares began to fall and on 29 October 1929 the prices fell down and there were no buyers available at any price. This led to the depression in economic field and this spread all over the world.The most vulnerable impact of great depression was human suffering.
Within a short span of time the world output and standards of living fell down. The direct impact was unemployment, homelessness,poverty and farm losses. The conditions began to improve in 1930, but the total recovery was not attained at the end of the decade. The great depression had created a political instability and an economically downtrodden people, this gave way for the Nazi seizure of power and fascist empire building.
As mentioned earlier the situation was similar in Asia, where urban and rural impoverishment was a normal feature of economic life.