The Great Depression
The Great Depression began around 1929 and continued until the mid-1930s, representing one of the most profound economic crises in modern history. Most parts of the world experienced catastrophic declines in production, employment, incomes, and trade during this period. While the timing and specific impacts of the depression varied from nation to nation, many agricultural regions and communities were the hardest hit due to a severe crash in agricultural prices. Overproduction in these areas led to excess supply without corresponding demand, resulting in thousands of tons of farm produce going unsold and rotting in the fields.
Several factors contributed to the onset of the Great Depression:
1. Agricultural Overproduction: Farmers expanded production to counter falling agricultural prices, worsening market saturation.
2. Financing through US Loans: Many countries relied on loans from US banks, which quickly dried up during economic downturns, leading to a financial squeeze and the collapse of various financial institutions.
3. Global Trade Policies: The US implemented protectionist measures, like doubling import duties, which severely restricted global trade and further deepened the economic crisis.
In the United States, the effects of the Great Depression were particularly devastating, with the closure of thousands of banks and businesses, leaving millions unemployed. By 1933, over 4,000 banks had failed, and about 110,000 companies collapsed. Meanwhile, in countries like India, the crisis revealed how integrated the global economy had become, with Indian exports and imports decreasing drastically during the depression years, leading to widespread rural hardships, particularly among agricultural workers. Despite these hardships, urban communities sometimes fared better due to lower prices and expanded industrial investment. The overall psychological impact of the Great Depression shaped social and political movements, leading to civil unrest and demand for reforms.