The Great Depression was a time of severe economic depression in the decade prior to World War 2. It is held as the example for how far the global economy can decline. It left hundreds of thousands of people without a job and forced the closure of many businesses as tax revenue, personal income, profits and prices dropped. Banks closed their doors as they lost immeasurable amount of money in the stock market crash. International trade also decline by as much as 2/3rds. Many countries who relied on heavy industry suffered huge financial blows to their economy and construction halted in many countries the world over.
The Great Depression began when the stock market in America began to decline around September 4, 1929. It became a worldwide concern on Black Tuesday, October 29, 1929, when then stock market in America crashed. This drastic drop in stock prices spread to nearly every country in the world creating a huge economic depression. As many banks had invested their customer’s money into the stock market they too began to close. This created a panic in many countries and many people withdrew their money from banks. This in turn lead to the closure of many more banks and those that did not get their money out in time effectively became bankrupt. Business was also highly affected. Most had lost their capital in the stock market crash or when the banks closed down. This forced businesses to close or drastically cut staff numbers, hours and pay. As people did not have much money they cut back on their spending and did not purchase luxury items. This lead to the widespread closure of businesses and caused a dramatic jump in the number of unemployed people in many countries around the world.
It took many, many years for countries around the world to recover from the Great Depression. In most countries the Great Depression lasted until the late 1930’s or early 1940’s, but some countries did not recover until after World War Two. As prices began to rise on items such as meat, wool and mining products the economies of many countries began to recover. It was a slow process for the hardest hit economies such as the United States of America, Australia, Chile, Bolivia, Peru, Netherlands, the United Kingdom and South Africa. Many governments the world over went through huge reforms to try and ensure that such as depression would never happen again. Many of the people that lived through the Great Depression are still very thrifty with their money and very wary of banks.