The Great Depression
Many a times we run out of money
Sometimes we use up our pocket money and need more money
Sometimes we even lose our money somewhere and can’t find it.
In any manner not having money is a very bad situation at times.
This turns worse if its on a national or global level.
Such a situation was created in the 20th century.
It was after the World War 1, when production of goods and services was quite high.
USA was on its peak of economic growth.
The Great Depression began around 1929.
It lasted around middle of 1930s. Most of the world experienced a lot of economic ups and downs.
The exact timing of depression varied according to the country.
In general agricultural regions and communities were the worst affected.
As the prices of agricultural products fell the most they were affected the longest.
There were several reasons for The Great Economic Depression
1. Agricultural overproduction
As production was more and demand less, there was a fall in prices.
Farm produce rotted due to lack of buyers.
2. Lack of capital
US created a lot of fund to loan people. They could create funds quite easily when the times were good.
But the lenders to USA panicked at the first sign of trouble.
When the stock market crashed in 1929, most of the investors and shareholders started to panic.
Many people started to panic and withdraw money from their bank accounts.
This caused many banks to close down. By 1933, more than 4000 banks had closed down.
On the other hand loans were scarce in market now.Companies started shutting down now
By 1932, about 1.10 lakh companies had collapsed.It was only by 1935 that a little recovery was made.
Great Depression’s effects on society, politics and international relations, and on people's minds, proved to be much more long lasting.
The great depression also had effects on India.
By the end of 19th century, economy was functioning on a global level
The effects of economy in country affected some other country directly or indirectly.
The lives, economies and societies worldwide were affected.
India was one of the largest manufacturer and exporter of agricultural goods.
On the other hand it was a big importer of manufactured goods also.
The Great Depression directly affected Indian Trade.. India’s exports and imports nearly halved between 1928 and 1934
Peasants and farmers suffered more than the urban residents.
The officers in India refused to reduce taxes.
All over India prices increased.People used up their savings, mortgaged lands, and sold whatever jewellery and precious metals they had to meet their expenses.
This was the time when India turned to exporting precious metals and gems.
The famous economist John Maynard Keynes thought that this promoted global economic recovery.
These exports also sped up Britain’s economic recovery.
In the middle of such economic unrest, MK Gandhi had launched the Civil Disobedience Movement.
This movement was a protest to the unjust rules of Britishers in India.
Although the only people who benefited from the depression were the middle class people with fixed salaries.
They had a fixed income while the prices of goods in market went down.
Industrial investments grew when the government gave tariffs protection to industries under national pressure.
The great economic depression was one of the hardest times the world economy ever had to face.