What Were The Results Of The Great Depression

What were the causes and major results of the Great Depression?

Discuss the causes and major results of the Great Depression in the United States and Europe. Was it also a part of the Great War’s aftermath? Was it effectively over by 1938?

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booboosmoosh eNotes educator| Certified Educator

I never used to like this part of American history, but working with piece of literature (Steinbeck, for example), I had to learn about the Depression it is something I find fascinating. Its causes were many: after WWI, people started to manufacture and export like crazy. Farmers invested in new machinery so they could produce more crops to ship overseas to countries devastated by the war. The U.S. made loans to other countries suffering the after-effects of the war.

The Stock Market was a mess because money was invested, but no one was keeping track of the number of stocks being sold, whether there was money to support the sale of those stocks; bank loans weren't secured. Cars were manufactured beyond demand—only to sit on the lots. The money was invested in the cars, borrowed from banks, but could not be turned into cash if no one was buying cars. When people got nervous and started to try to withdraw their savings (hello, It's a Wonderful Life), there was a run on the banks. Money in banks had been invested in loans to build homes and businesses. When everyone went to get their money at the same time, the banks had to close down—loans had been made, which meant the money wasn't in the bank, but invested in the community. (Interest collected on loans allowed banks to pay dividends to their customers.) The Stock Market plummeted, people lost jobs and homes. Farms failed and went to seed as banks foreclosed on properties. There was a terrible drought. People traveled across the country to find jobs. I read somewhere that four or five girls might share an apartment, having only two nice dresses between them. They would take turns wearing the dresses—only two girls going out each day—to see if they could get jobs so they could survive. People who traded heavily in the Stock Market lost everything. Families that had once been wealthy were quickly reduced to living very frugally if they were lucky, or finding themselves broke. There were soup and bread lines to keep people from starving. Some families lived in lean-tos, where a piece of metal (for example) was placed on an angle (leaning) against a building. This was all a family might have to protect them from the weather. It's hard to imagine how bad it was. I know my mother said they ate bread and butter for dinner and were happy because they weren't hungry. Things we take for granted today (chocolate, going to the movies) were luxuries people then could no longer afford...but it also showed what the American people were made of. They worked hard and pulled together to get through. In the 1930, FDR introduced programs to aid people and jump-start the economy. Then in the 1940s we were at war again. And wars mean jobs. Sadly, the economy didn't really turn around until the 1940s.

wannam eNotes educator| Certified Educator

As post 6 points out, the Great Depression was the starting point for great government involvement.  At the time, people needed help.  Systems like welfare and social security were necessary.  Many people were literally living in homeless communities (often called Hoovervilles).  People had no homes, no jobs, and no hope.  Banks literally closed and people lost everything they had saved for a lifetime.  The governement had to step in and help its people.  At the time, the system work (for the most part).  Most people would be literally starving to death before they accepted a handout.  The pride and the hope for an independent future drove the population to use only what government assistance was absolutely necessary.  Over time, this mindset began to change.  Today, many people want to be cared for by the government and the government simply doesn't have the means to support its citizens in this manner.  Of course, there is another side as well.  Today, many people cannot afford to be removed from government help.  They can only afford to live with assistance because they cannot find a job that makes the jump from their current pay rate to one high enough to live without assistance.  What was once a necessity because of the war and the Great Depression has now become a trap for both citizens and government alike.

belarafon eNotes educator| Certified Educator

I will echo #9: the major result of the Great Depression was the creation of the American Entitlement Society. We have lost our innovation, our personal responsibility, and our drive for success, and instead we are complacent and happy to let Big Government take care of us. Even after FDR's New Deal and Great Society, entrepreneurs strove to create products that people wanted and needed, but as time goes on and the government takes a greater role in mothering us, we are losing that drive. Nothing is our fault anymore, and if we get into a mess because of stupid decisions we cry out for the government's help instead of taking responsibility.

To succeed, one needs to be objective and personally responsible. If the Great Depression taught us anything, it was that people had the ability to take care of themselves in hard times, even at great personal cost. If we had another true Depression today, I believe many more people would fall by the wayside because they depend so heavily on the government for their livlihood. Remember, government aid was never intended to be an income replacement; it was intended to be a safety net from which one aspires to escape. Today, government aid is a legitimized alternative to hard work and personal responsibility.

rrteacher eNotes educator| Certified Educator

It was, however, over in Germany earlier than that, really by 1936 there was basically zero unemployment due to war production. This was the so-called "Munich miracle." As for the causes, stated very briefly, the Depression hit Europe hard because it was tied economically to the United States. U.S. banks called in loans they had made to European banks, and the result was a credit collapse. It worked both ways, however- one of the reasons farm prices collapsed in the USA was the resumption of farming in Northern Europe after the war.

accessteacher eNotes educator| Certified Educator

One of the results of the Great Depression was the long term poverty experienced by so many of America's public. This continued for a very long time, and really only stopped with WWII and the way that production helped boost the economyto such a significant extent. The reality of day to day living for so many Americans has been depicted in lots of different ways, but my favourite is Steinbeck's novel, The Grapes of Wrath. This focuses on the fortunes of a family forced to leave their land for work.

readerofbooks eNotes educator| Certified Educator

One of the results of the Great Depression was that banks were afraid to lend money. Credit was frozen. This, in turn, created greater problems, because no businesses can be started or expanded without credit. In other words, you need money to make more money. However, when credit was frozen, it broke this down. Also international trade was curtailed in many ways. This also lead to a decreasing of jobs.

vangoghfan eNotes educator| Certified Educator

One result of the Great Depression was the beginnings of much greater government involvement in the U. S. economy, with long-term consequences that we are beginning to see today.  (Just read today, for instance, that Stockton, California is the latest and largest U. S. municipality to declare bankruptcy because it had over-committed itself to unfunded, unfundable liabilities.)

litteacher8 eNotes educator| Certified Educator

As with our current economic condition, the Great Depression was caused by a combination of greed and economic irresponsibility.  Like now, there was an expanding of the stock market and more people were involved, which led at least in part to instability.

pohnpei397 eNotes educator| Certified Educator

The Great Depression, at least in the United States, was not over by 1938.  It really did not end until at least the next year or even 1940.  The only thing that truly ended the Depression was the beginning of war production once WWII started in Europe.

icefur | Student

In the late 1920s USA was the richest nation in the world. The American business was the engine driving the world economy. Everyone traded with USA. In 1929 economic disaster did strike. In the USA the Wall Street Crash started a long depression that quickly cause economic problems throughout the world. It damaged the trade and industry of all countries. It affected relations between countries. It also let to important political changes withen countries

Effects of Depression

1. Britain suffered high unemployment. It was not willing to get involved sorting out international disputes while its economy was suffering.

2. In Germany unemployment and poverty led to people to elect Nazis, who promised to solve economic and social problems. Adolf Hitler and the Nazis made no secret of their plan to overturn the Treaty of Versailles and regain lost German territory.

3.The USA was inwilling to support economic sanctions when its own trade was in such a mess.

4. Worried about chaing the situation in Germany, France begain building a series of frontier defences on its border with Germany.

5. In Italy economic problems encouraged Mussolini to try to build an overseas empire to distract people's attention from the difficulties the government faced.

6. In Japan the depression threated a complete collapse of the country's industry. It led the Japanese to take over Manchuria- part of China.

Hope it helped :)

quentin1 | Student

The Great War (WWI) left British and other European countries in economic distress. The U.S. did not help them rebuild their economies. In some cases, we made them war loans and expected them to repay those war loans. U.S. attempts to profit on British and European economic distress contributed to the collapse of European markets and the world market.