or Depression of 1929
Longest and most severe economic depression ever experienced by the Western world.
It began in the U.S. with the New York Stock Market Crash of 1929 and lasted until about 1939. By late 1932 stock values had dropped to about 20% of their previous value, and by 1933 11,000 of the U.S.'s 25,000 banks had failed. This led to much-reduced levels of demand and hence of production, resulting in high unemployment (by 1932, 2530%). Since the U.S. was the major creditor and financier of postwar Europe, the U.S. financial collapse led to collapses of other economies, especially those of Germany and Britain. Nations sought to protect domestic production by imposing tariffs and quotas, reducing the value of international trade by more than half by 1932. The Great Depression contributed to political upheaval. It led to the election of Franklin Roosevelt in the U.S. and major changes in the structure of the U.S. economy brought about by his New Deal . It directly contributed to Adolf Hitler 's rise to power in Germany in 1933 and to political extremism in other countries. Before the Great Depression, governments relied on impersonal market forces to achieve economic correction; afterward, government action came to assume a principal role in ensuring economic stability.