The 29 'Crisis, the Great Depression

The 29 'Crisis, the Great Depression

With the economic crisis that our current society is suffering, it is easy to look back and compare with the great crises that have affected the world in recent times. But there is one that sounds louder than others: the 29 'crisis wave Great Depression, also known as the "Wall Street crash"Or"Crack of 29"". It is one of the biggest economic crises in history.

After the First World War, the new countries that had resulted from the war began to progress. They talk about the 'happy twenties'. In addition, the United States emerges as the great economic and industrial power. Its industrial growth, based mainly on theories of Taylor and Ford, it was extraordinary.

However, the primary sector did not grow in the same way but much slower, so there was an exodus from the countryside to the city. The climate of bonanza was such that a large part of the population decided to acquire shares in industrial companies.

In fact, almost a tenth of the population would invest their savings in the stock market. Behind this, starting in 1927 the financiers of Wall Street decided to focus their attention on the domestic market. This fact increased the values ​​of North American companies and with it, the problems.

The main Causes of the 29 'Crisis they are three. In first place, a agricultural overproduction which leads to an increase in products on the market and, therefore, a drop in prices and rural incomes. More is produced than is consumed and by not selling, layoffs begin to occur.

The second reason is the industrial underconsumption camouflaged and maintained thanks to credits, that the population gets used to asking for them in order to buy what they want. Y third, and most importantly, stock market speculation mentioned above by the financiers of Wall street, which made money fast even though the stock was overvalued.

On October 22, 1929, the shares stopped rising and began to fall until Thursday 24 takes catastrophic proportions, a day that went down in history as the "Black thursday”. Shares began to be sold to try to save as much money as possible and a snowball ensued: as a result, the price of shares fell more and more rapidly. Up to 12 million shares were sold in a single day.

Then came the so-called 'Black tuesday', In which the stock market crashed, as a result of the loss of 24,000 million dollars in just one week. This would bankrupt speculators and paralyze credit sales.

Panic spread among the population. His answer was go to the banks to withdraw all the savings they had, but they could not repay that money since it had been invested in loans or investors, which produced the chain bankruptcy of the banks (almost 4,000 in just three years) and the consequent suicide of businessmen and financiers.

Unemployment skyrocketed, which led to the closure of numerous businesses and in 1933 there were 14 million unemployed. The Government could have tried to save the situation and impose calm, but it decided not to intervene, limiting itself to waiting for time to pass and see if it would solve itself.

Due to the strong dependence that Europe had on the United States, the crisis also affects it. The reduction of American imports or the repatriation of American banks were some of the effects. Austria is one of the first affected by the failure of several of its banks.

With the Roosevelt's rise to power in 1933, the well-known “New Deal”, Based on Keynes ideas that allowed the intervention of the State when the situation required it.

Among the measures it contained was to favor investment, credit and consumption, which would lead to a reduction in unemployment. There was aid for banks and subsidies for farmers. An increase in wages and a reduction in working hours were also proposed. In addition, health care plans and a new retirement and pension system were designed.

It is a crisis that would not end until well into 1939, year in which the WWII.

Graduated in Journalism and Audiovisual Communication, since I was little I have been attracted to the world of information and audiovisual production. Passion for informing and being informed of what is happening in every corner of the planet. Likewise, I am pleased to be part of the creation of an audiovisual product that will later entertain or inform people. My interests include cinema, photography, the environment and, above all, history. I consider it essential to know the origin of things to know where we come from and where we are going. Special interest in curiosities, mysteries and anecdotal events in our history.

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