History of America 1932-1945 (Members Only)

History of America 1932-1945

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Our digital history of America 1932-1945 begins with the Great Depression. After the collapse of stock prices on Black Tuesday, September 4, 1929, the Depression eventually became worldwide. Still, the stock market crash was but a symptom of the Great Depression, not the cause, and it became the longest, deepest, and most widespread depression of the 20th century.

Over the next three years, worldwide gross domestic product fell by 15%. (To draw a comparison, worldwide GDP lost less than 1% during the Great Recession of 2008-2009.) But some global economies had begun to recover by the mid-1930s, though in many countries, the Great Depression persisted until the outbreak of World War II (when it gave way to an even greater misery).

The Great Depression devastated rich and poor countries alike. Household income, tax revenues, corporate profits and consumer and industrial prices all plummeted, while global trade dropped by more than 50%. Unemployment in the U.S. rose as high as 33% in the cities. Cities around the world, especially those with an industrial economy, were hit hard, with mining and logging hit the hardest. Construction came to a standstill in many countries. And farming communities withered as crop prices fell by two-thirds.

Interest rates dropped and loans became more affordable, but the certainty of deflation made people reluctant people to borrow. As prices continued to decline, a deflationary spiral began in 1931. Conditions worsened as crop prices declined and drought caused farmers to abandon their Dust Bowl farms and migrate to California.

Individual countries tried to protect their economies with tariffs, and the 1930 U.S. Smoot–Hawley Tariff Act was followed by retaliatory tariffs in other countries. With that, the collapse in global trade was greatly worsened by protectionism.

World War II banished the Depression with a sudden surge of wartime industrial production, and it had unimaginable effects worldwide. Among these, the shooting war that had taken some 70 million lives gave rise to the Cold War, and a war-weary Europe became divided into Western and Soviet blocs.

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1932-1845 Index | Great Depression: SocietyCultureEconomyBackgroundCausesPolicy | Power: Franklin Roosevelt: GovernanceNew DealSecond New DealExtremistsForeign Affairs | World War II: Homefront: SocietyEconomy | Harry Truman

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