Assignment # 01

Report Of great Depression Of 1930

Submitted To
Dr. Adnan Sial
Prepared By
Shahroz Ali
(Bsf1903441)
Anwisha Latif
(Bsf1903441)
Nazish Nazim
(Bsf1903441)
Session & Section
2019-23 (Morning B)

University of Education
(Lower Mall Campus)

What is Depression?
Depression, in economic terms, refers to a period of prolonged and severe economic contraction
characterized by a decline in economic activity, rising unemployment rates, falling industrial
production, and a general sense of economic pessimism.
Why the 1930 Depression is named "The Great Depression “The 1930 Depression is named as
"The Great Depression" because it was the longest, most severe, and most widespread economic
depression in modern history. It affected almost every country in the world, and it had a
profound impact on the global economy and society.

History of the Great Depression:

The Great Depression of 1930 began in the United States in October 1929 when the stock market
crashed. The crash led to a chain of events that triggered a massive decline in consumer
spending, business investment, and industrial production. The Depression lasted for almost a
decade and profoundly impacted the United States and the world.

Causes of the Great Depression:

There were several causes of the Great Depression. One of the primary causes was the
speculative boom that occurred in the stock market in the 1920s. This boom was fueled by easy
credit, which led to an unsustainable rise in stock prices. The bubble burst triggered a chain of
events that led to the Depression. Other causes included overproduction, falling demand for
goods, high tariffs and trade barriers, and a lack of government intervention.
Stock Market Crash: The stock market crash of October 1929, also known as "Black Tuesday,"
is often cited as the starting point of the Great Depression. The crash led to a loss of confidence
in the economy and a sharp decline in consumer spending.
Overproduction and Under consumption: In the years leading up to the Depression, industrial
production significantly increased, but consumers did not have the purchasing power to keep up
with the supply. This led to a surplus of goods and a decline in prices, which in turn led to a
decline in profits and increased layoffs.
The decline in Agricultural Prices: Farmers were hit particularly hard by the Depression, as
prices for agricultural products fell sharply, and many farmers were unable to repay their loans.
Credit Bubble: In the years leading up to the Depression, there was a rapid expansion of credit,
which fueled an unsustainable speculative boom in the stock market and real estate markets.
Banking System Failures: In the early years of the Depression, numerous banks failed due to a
combination of factors, including bank runs, a lack of deposit insurance, and a decline in the
value of assets held by the banks.
International Economic Instability: The Depression was not limited to the United States, as
economic instability and declining trade led to a global recession. International trade fell sharply,
and many countries implemented protectionist policies that further worsened the economic
situation.
Government Policies: Some economists argue that government policies, such as the high tariffs
and trade barriers implemented by the United States and other countries, contributed to the
severity of the Depression by limiting international trade and cooperation.
These factors combined to create a perfect storm that led to the Great Depression, which lasted
for almost a decade and profoundly impacted the global economy and society.

Results of Depression:
The Great Depression had a devastating impact on the global economy and society.
Unemployment rates soared, businesses went bankrupt, and many people lost their homes and
life savings. The Depression led to a decline in international trade and cooperation, and it paved
the way for the rise of authoritarian regimes around the world. It also led to the adoption of
Keynesian economics, which emphasized the role of government in regulating the economy.
High Unemployment Rates: The Great Depression resulted in extremely high unemployment
rates in the United States and many other countries. In the U.S., the unemployment rate reached
nearly 25%, with millions of people out of work for years.
Economic Hardship: The Depression resulted in widespread economic hardship for many
people. Many lost their jobs, homes, and life savings, and struggled to make ends meet.
Decline in Industrial Production: Industrial production fell sharply during the Depression, as
businesses struggled to stay afloat and demand for goods declined.
Decline in International Trade: International trade fell sharply during the Depression, as
countries implemented protectionist policies and trade barriers, leading to a decline in global
cooperation and trade.
Rise of Authoritarian Regimes: The economic and political instability caused by the
Depression led to the rise of authoritarian regimes in many countries, including Germany, Italy,
and Japan.
New Economic Policies: The Depression led to the adoption of new economic policies,
including Keynesian economics, which emphasized the role of government in regulating the
economy and promoting full employment.
Creation of New Government Programs: The Depression led to the creation of numerous new
government programs in the United States, such as the Social Security system, which aimed to
provide a safety net for the elderly and disabled.
Increased Government Regulation: The Depression led to increased government regulation of
the economy, as policymakers sought to prevent a similar economic collapse from happening
again.
These are just some of the many results of the Great Depression, which had a profound impact
on the global economy and society and changed the course of history in many ways.

Role of Institutes played during and After the Great depression

During the Depression, various institutions played a role in mitigating its effects. Governments
around the world implemented a range of policy measures, including monetary and fiscal
policies, to try and combat the Depression. In the United States, President Franklin D.
Roosevelt's New Deal programs aimed to provide relief, recovery, and reform to the American
people. The New Deal included measures such as the creation of the Social Security system, the
establishment of minimum wage laws, and the construction of public infrastructure projects like
roads and bridges. The International Monetary Fund (IMF) and the World Bank were also
established after the Depression to promote international cooperation and economic
development.
Government: Governments around the world played a key role in responding to the Great
Depression. In the United States, President Franklin D. Roosevelt implemented the New Deal, a
series of policies and programs aimed at providing relief, recovery, and reform. The New Deal
included programs such as the Civilian Conservation Corps, the Works Progress Administration,
and the Social Security system. Other governments implemented similar policies, such as the
Soviet Union's Five-Year Plans and Germany's economic policies under Hitler.
Central Banks: Central banks played a key role in responding to the Great Depression, as they
sought to stabilize the financial system and prevent bank failures. In the United States, the
Federal Reserve implemented a series of measures, such as lowering interest rates and increasing
the money supply, in an attempt to stimulate the economy.
International Organizations: International organizations such as the International Monetary
Fund (IMF) and the World Bank were created in the aftermath of the Great Depression to
promote international economic cooperation and provide assistance to countries in need. These
organizations played a key role in stabilizing the global economy in the post-war period.
Labor Unions: Labor unions played a key role in advocating for the rights of workers during the
Great Depression. They organized strikes and protests and pushed for policies such as minimum
wage laws and collective bargaining.
Business Leaders: Business leaders played a key role in responding to the Great Depression, as
they sought to adapt to the new economic environment and survive the downturn. Some business
leaders, such as Henry Ford, advocated for policies such as shorter work weeks and higher wages
in an attempt to stimulate consumer spending.
Non-Profit Organizations: Non-profit organizations played a key role in providing assistance to
those in need during the Great Depression. Organizations such as the Red Cross and the
Salvation Army provided food, shelter, and other forms of aid to those affected by the economic
downturn.

These are just some of the many roles played by various institutions during and after the Great
Depression, as society grappled with the economic and social impact of the downturn.

Conclusion of the Great Depression:

The Great Depression of the 1930s was a defining moment in world history, with profound
economic, social, and political implications that continue to shape the world we live in today. It
was a period of extreme economic hardship, marked by high unemployment, widespread
poverty, and a decline in industrial production and international trade. The causes of the Great
Depression were complex and multifaceted, including factors such as stock market speculation,
agricultural overproduction, and a lack of government regulation.
Despite the severity of the crisis, however, the Great Depression also paved the way for
significant social and economic changes. Governments around the world responded to the crisis
by implementing new policies and programs aimed at promoting economic stability and
providing relief to those in need. These policies included the New Deal in the United States,
which created a new social safety net and established new government regulations on the
economy.
The Great Depression also played a key role in shaping international relations in the post-war
period. The economic and political instability caused by the Depression contributed to the rise of
authoritarian regimes in many countries, while the global economic downturn led to the adoption
of new economic policies and the creation of new international institutions such as the
International Monetary Fund and the World Bank.
Today, the lessons of the Great Depression continue to inform our understanding of economics
and government policy. The Depression highlighted the importance of government intervention
in the economy, as well as the need for international cooperation and coordination to promote
economic stability and growth. It also underscored the importance of social safety nets and the
need for policies that protect the most vulnerable members of society.
In conclusion, the Great Depression was a seminal event in world history, with profound
economic, social, and political implications. While the period was marked by extreme hardship
and suffering, it also laid the foundation for significant social and economic changes and
highlighted the importance of government intervention and international cooperation in
promoting economic stability and growth.