The booming 20s and the financial crash

It is true that the First World War affect some European regions, but the economic crisis affected all the planet and questioned the foundations of the capitalist system. Started by the United States but just spreading around the world

Frias, Ana Belen. "Unit 5." What changes affected the world in the inter war period?. 13 May 2012.

1920's decade

After the First World War, United States was located in a privileged position compared to other countries. Industrial growth was very good based on the theories of Taylor and Ford on the organization of work and production. 

Moreover agriculture was not as successful and the growth was rather dismal. It was a time when consumerism was a high number and the United States was seen as a rich country, the country promised. 

The good weather was in the population is what made people buy the shares of industrial companies. Until late 1929 the stock rose about 90%. The actions did people make money and this benefited them and investing in the shares of a rich country while the other countries were in a rather critical economic situation. The stock market continued to grow ever more and more.


Siloverstein, Barret. "The 1920s A Decade of Change."http://www.ncmuseumofhistory.org. North Carolina Museum of History, 2005. Web. 13 May 2012. <http://www.ncmuseumofhistory.org/collateral/articles/s04.1920s.decade.change.pdf>.

The origin of the financial crisis and the Black Thursday 24th October 1929

On Thursday 24 October 1929 saw the crack, the explosion, the stock market in New Yor after leaving 13 million shares for sale and not find a buyer, the mismatch between supply and demand causes the value of these shares plummet. 

On October 29 and were more than 16 million of securities trading at the low encuentraron no buyer and caused the ruin of thousands of investors, many had purchased these securities with credits that after the explosion and could not afford. 


Many people ran scared banks to withdraw all their money and thus be affected as little as possible. 


The banks were overwhelmed by bad debts, credits and stood no more debt finance. In 1920 some 600 banks failed in 1930 and did about 1,345 just a year later 2298.

The business landscape was also upset because before the credits were obtained easily because enough money were available, but now everything had changed and get a credit was almost impossible given the lack of money.


This caused many companies go bankrupt and unemployment began to rise in a fairly high.

The Wall Street Journal on line, “Year end review”, 2008, http://online.wsj.com/public/page/quarterly-markets-review-010209.html. accesado 4 diciembre de 2008)

The great depression

The stock opened a global economic downturn that extended throughout the decade of the 30 and had strong repercussions in the economic, social and political, this is known as the Great Depression. Unemployment surged to all social classes, prices fell and there was immigrations caused by unemployment. 

There were about 14 million unemployed. The crisis did not stop in the U.S., because the economic dependence of other countries depended on the United States. Was a big hole in world production and gender tensions in the labor market.

http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/index.html

The new deal

In 1933 Roosevelet become president in order to rebuild the economy. It was then developing a plan called "New Deal" based on the ideas of economist John Keynes, even though it was in favor of liberalism, counseled state intervention in certain cases. 

This plan was designed to encourage investment, unemployment and the credit may well improve the economy and population of the United States and around the world.

Thanks to this plan were provided aid to banks, subsidies for working people in need, but most of the farmers after the great loss suffered after the bursting of the stock market, increased wages and reduced working hours.


Trueman, C.. "The New Deal."www.historylearningsite.co.uk. historylearningsite.co.uk, 2000. Web. 13 May 2012. <http://www.historylearningsite.co.uk/new_deal.htm>.

Europe and the big depression

The most outstanding feature of this stage is perhaps the highest increase in unemployment worldwide. 

Those who managed to keep his job, did so with a salary less than that initially available to them. That which previously was wealth, poverty became, what was happiness became sadness, increased mortality and decreased the number of births. The dollar lost value, and international commerce decreased as all governs began to take protective measures for their country.

Until 1933 the economic recovery did not notice a change. Yet the effects of the crisis spread to the beginning of World War II.


ed, tema 9, la crisis economica de 1929, editorial sabuco, libro 1 de bachiller. 
http://bachiller.sabuco.com/historia/La%20crisis%20de%201929.pdf