The Great Dipression

The Great Depression: The Great Depression began around 1929 and lasted till the mid-1930s. During this period, most of the countries of the world experienced catastrophic declines in production, employment, income and trade. The exact timing and impact of the depression varied country to country.

During this period, agricultural regions and communities were worst affected as the fall of the agricultural price was more than the agriculture and industry of USA. But after the war, there was abundant supply in the market and it pushed down the prices of industrial goods and agricultural products.

Facts Responsible for Depression: A combination of several factors were responsible for the depression

Conditions Created by War :- The Great Depression was the result of war . There was an immense industrial expansion due to the Increase demand of goods supplied to the army , during the period of the First World war . After the war , the demand for these goods suddenly dropped . So there was also a large fall in the agricultural prices due to reduced demand . Farmers tried to expand production to maintain their overall income, This worsened. the situation, pushed down the prices of agricultural products even further.

Shortage of Loans :- In the mid 1920's many countries financed their investments through loans from the USA while it was often very easy to raise loans in the USA during the boom period . Lenders in USA panicked at the first sign of trouble . Countries that depends crucially on US loans now faced an acute crisis .

Collapse of banking System :- With the fall in prices and the prospect of a depression , Banks in the USA slashed domestic lending and some stopped bank loans , thousands of banks went bankrupt and were forced to close down . Factories closed , leading to unemployment , which further aggravated the crises . The US banking system collapsed .

Large Scale Unemployment :- Farm could not sell their harvests , which led to business collapse . As a result large scale unemployment occurred .

US: Most Affected Country by Depression: The US was the industrial country, most severely affected by the depression, as the banks had cut domestic lending and called back loans. Farms could not sell their harvests, households were ruined and businesses collapsed. The consumerist prosperity of the 1920s disappeared and unemployment increased. Ultimately, the US banking system collapsed because the banks were unable to recover investments, collect loans and repay depositors.Thousands of banks went bankrupt and were forced to close. By 1933, over 4000 banks had closed. Between 1929 and 1932, about 110000 companies had collapsed. The US attempted to protect its economy in the depression by doubling the import duties, which hit the world trade badly.

India and the Great Depression: In the 19th century, colonial India had become an exporter of agricultural goods and importer of manufactures. The Great Depression immediately affected Indian trade.

Effect on Exports: India's exports and imports declined to half and prices of primary products like wheat and jute fell sharply (wheat 50 per cent and jute more than 60 percent between 1928 and 1934. But the colonial government refused to reduce revenue demands and the peasants producing for the world market became the worst sufferers.

The jute producers of Bengal grew raw jute that was processed in factories for export in the form of gunny bags. But as gunny exports collapsed, the price of raw jute decreased. In the depression years, India became an exporter of precious metals, especially gold. Economist John Maynard Keynes thought that Indian gold exports promoted global economic recovery. It certainly helped speed up Britain's recovery, but did little for the Indian peasants.

Effect on Peasants and Urban Dwellers: Across India, peasants' indebtedness increased and there was much dissatisfaction in the rural areas. At that time, Mahatma Gandhi launched the Civil Disobedience Movement in 1931.

The depression proved less problematic for urban dwellers. As prices fell people getting fixed incomes now found themselves in better condition.

#Catastrophic :- A terrible disaster .

Chapters

The Rise of Nationalism in Europe I

The Rise of Nationalism in Europe II

Nationalist Movement In Indo China - I

Nationalist Movement In Indo China - II

Nationalism In India I

Nationalism In India II

The Making of a Global World I

The Making of a Global World II

The Age of Industrilisation I