The effects of the 1929 depression were more far-reaching than any other recession in history. This depression began with a fall in the prices of agricultural commodities: it first occurred in the price of lumber (1928), largely due to Soviet lumber competition, but the greater disaster came in 1929, with the overproduction of wheat in Canada, and the United States' forced suppression of the price of basic grains in all agricultural origins. Whether in Europe, the Americas or Australia, the agricultural recession was further exacerbated by the financial meltdown, especially in the United States, where a speculative fever led to a massive pullback of capital from Europe, followed by the panic-inducing Wall Street stock market crash in October 1929.In 1931 the French bankers recouped their loans to the Austrian banks but this was not enough to pay off the debt. This catastrophe bankrupted the system in many countries of Central and Eastern Europe: it led German bankers to defer repayment of their foreign debts in order to protect themselves, and in turn also endangered British bankers who had invested heavily in Germany. The shortage of capital brought about in all industrialized countries a sharp reduction in exports and domestic consumption: the absence of markets inevitably led to the closure of factories, and the fewer the goods, the fewer the transport of goods, which inevitably jeopardized the shipping and shipbuilding industries. In all countries, the consequence of the recession was mass unemployment: 13.7 million in the United States, 5.6 million in Germany and 2.8 million in the United Kingdom (the maximum figure for 1932). The Great Depression also had a major impact on Latin America, resulting in the loss of foreign investment and merchandise exports in a region almost completely dominated by European and American bankers and merchant entrepreneurs. It is estimated that the world lost $250 billion in money during the time of the Great Depression.

Shortly after the end of the First World War, the first economic crisis broke out in the capitalist world between 1920 and 1921. After the crisis, the U.S. economy began to recover, and then gradually tended to prosper, creating a miracle in the history of the capitalist economy. 1923 to the fall of 1929, the U.S. productivity growth of 4% per year, at this time, the entire U.S. society's values have undergone a huge change, to become rich and wealthy become people's biggest dream, speculation is favored, the prevalence of hedonism, the spiritual life more and more impetuous and vulgar, political corruption is extreme, people put this time of the year, and the world has become the most corrupt. The political corruption was so extreme that people called the United States the spiritual "Age of Hunger" or the "Crazy Twenties". Arthur Schlesinger, Jr., a famous American historian, later said that the realism of the 1920s in the United States made it easiest for people to feel that "capitalism has come to an end."

While this boom created a golden age of capitalist development, the boom itself lurked with profound contradictions and crises. Agriculture never fully recovered from the postwar depression, farmers remained poor throughout this period, rural purchasing power was insufficient, and farmers went bankrupt. In addition, industrial growth and the redistribution of social wealth were extremely uneven. Industrial growth was mainly concentrated in some new industrial sectors, while old industries such as mining and shipbuilding were under-exploited, and there was a crisis of production cuts in the textile and leather industries, which resulted in a large number of unemployed workers. Between 1920 and 1929, the total industrial output increased by almost 50%, while the number of workers did not increase, and the number of workers in the transportation industry actually decreased. Mergers were prevalent during this period, and the wealth of society became increasingly concentrated in the hands of a few. One-third of the nation's income was held by the richest 5 percent; 60 percent of households earned $2,000 a year for subsistence; and 21 percent earned less than $1,000 a year.

Since most of the wealth is concentrated in the hands of a very small number of people, the purchasing power of the society is obviously insufficient, resulting in the U.S. economic operation of the increase in commodities and the difficulty of exporting capital, which further triggered the overproduction and overcapitalization; although the financial giants in the speculative behavior of the high profits, but a large amount of money has not been invested in the process of reproduction, but was invested in the securities that can get higher returns investment.

In addition, the underlying crisis in the balance of payments deepened the underlying crisis in the U.S. economy, where the growing economic power of the U.S. and the power of supply greatly exceeded the demand for all domestic and foreign capacity to pay. All of this heralded a major crisis.

In the 1920s, confidence in the economic outlook was centered in the stock market, with Yale professor Irving Fisher declaring in the fall of 1929 that "the heights already reached by stock prices look as if they will last." The Dow-Jones rose from 75 points in 1921 to 363 points at its peak in 1929, an average annual growth rate of 21.8 percent-a horrifying figure. We can assume that if 1921 was a reasonable level and the level of interest rates was essentially unchanged during those years, and if 363 was a reasonable level in 1929, then the profits of the companies included in the Dow-Jones would have grown at a rate of about 21.8% per year, and at a high rate of growth for 10 years, a situation that has rarely occurred in the history of mankind. The thriving scene that preceded the financial crisis in history has emerged.

Early 1929, the frenzied U.S. stock market as a wild horse out of the reins all the way to run wild. September 26, in order to stop the outflow of gold and to protect the status of the pound in the international exchange, the Bank of England will be the rediscount rate and the bank interest rate increased by 6.5%; 30, London and hundreds of millions of dollars of withdrawals from the New York, which induced the U.S. stock market plummeted. October 24, New York stock market suddenly collapsed! On October 24, the New York stock market suddenly collapsed, with stock prices falling so much that even the automatic ticker recorder on the floor could not keep up! The next two or three days, the consortium and the president have for the rescue move. 28, that is, President Hoover published a message of the third day, the stock market fell again; 29, the U.S. stock market once again a major crash. Within a week thereafter, Americans lost as much as $10 billion in stock exchange wealth! By mid-November, the New York Stock Exchange stock prices fell by more than 40%, the loss of securities holders up to 26 billion U.S. dollars, tens of thousands of ordinary Americans hard work of a lifetime of hard-earned money into thin air.

The Great Depression, which lasted until 1933, had a much deeper impact than any previous recession. During this period, U.S. Steel's stock fell from $262 to $22, General Motors' stock fell from $73 to $8, and every sector of the national economy suffered commensurate losses. During these three years, 5,000 banks failed, at least 130,000 businesses went out of business, the automobile industry declined by 95 percent, and in 1929 General Motors production fell from 5.5 million units in 1929 to 2.5 million in 1931. in July 1932, the steel industry was operating at only 12 percent of its capacity. By 1933, total industrial production and national income had plummeted by nearly half, wholesale commodity prices had fallen by nearly one-third, and merchandise trade had declined by more than two-thirds; one-quarter of the nation's labor force was unemployed. "Unemployment, second only to war, is the most widespread, the most deep-seated, the most unguarded malady of our generation, the social malady peculiar to the West in our time." This was part of an editorial written by The Times of London at the time in response to the effects of the Great Depression on Britain.

The Great Depression also had worldwide economic effects. As a result of the Depression, the American Finance Corporation had to withdraw its short-term loans abroad, and under its influence, in May 1931, Vienna's largest and most reputable bank, the Kreditanstalt für Wiederaufbau (Austrian Bank of Credit), declared that it was insolvent, thus causing a panic on the Continent.On July 9, Germany's Dennett Bank did the same, and for the next two days, all banks in Germany were ordered to take a vacation; and the Berlin stock exchange was closed for two months.In September 1931, Britain abandoned the gold standard, and 2 years later, the United States and almost all the major powers did the same.

World international trade also declined sharply under the impact of the Great Depression; it fell from $68.6 billion in 1929 to $55.6 billion in 1930, $39.7 billion in 1931, $26.9 billion in 1932, and $24.2 billion in 1933, a decline that exceeded the previous maximum decline in international trade of 7% many times over. Do the math and these individual figures will startle you.

In fact, it was a catastrophe that destroyed all hope that the world's economy and society could ever return to the good old days of the 20th century, and the years 1929 to 1932 were the valley from which a return to the good old days of 1923 was not only impossible, but unthinkable.

On the causes of the Great Depression, Friedman, the famous American economist, believes that: for the Great Depression, the Federal Reserve has a major policy responsibility that cannot be shirked. In the Great Depression, the collapse of some banks is very likely to trigger a chain reaction, the Federal Reserve should have intervened in a timely manner to restore public confidence, but the Federal Reserve acquiesced to the bank's collapse, did not take any strong action, and finally brewed a near total collapse of the financial system, so there was a collapse - run - collapse of the There was a vicious cycle of failure-run-failure. As the increase in the cash-in-circulation-deposit ratio and the reserve-deposit ratio lowered the money multiplier, it sharply deflated the money stock. Therefore, Friedman argued that the creation of the Great Depression was directly related to the policies of the Federal Reserve, and that adjustments in monetary policy should therefore be applied to solve the problems of the Great Depression. This explanation later became the dominant explanation of the Great Depression.

The Great Depression would not only affect the economy, but was also bound to have profound political implications. In the United States, there was the grant army of homeless veterans; there was the anti-capitalist movement in favor of expert rule; and there was the farm holiday movement that grew into sit-down strikes....... Another manifestation of the political turmoil was the outright victory of Franklin D. Roosevelt in the election of 1932, and with it came the "The New Deal acted as a "safety valve" for political discontent, effectively nullifying extremist movements, largely due to the fact that the New Deal greatly contributed to the development of the economy. This was mainly due to the fact that the New Deal greatly contributed to the development of the economy. At the end of Roosevelt's second "Hundred Days", the government provided at least 6 million jobs, and the number of unemployed was 4 million less than at the beginning of 1933; the total cash income of farmers in 1935 rose to nearly $7 billion, up from $4 billion in 1932; the number of industrial and commercial closures was only one-third of what it was in 1932; and the number of insurance companies was only one-third of what it was in 1932. one-third the number in 1932; total assets of insurance companies had increased by more than $3 billion, the banking industry had long since weathered the storm, and the Dow-Jones stock index was up 80 percent.

In Britain, the Labor Party, which had come to power in June 1929, was immediately faced with the problem of paying "unemployment benefits" to the growing number of unemployed, and "no one has any more chance of getting a job now than he has of winning the Irish raffle". "In August 1931, Prime Minister Ramsey MacDonald succumbed to pressure and dismissed his Labor government. In France, the Left was also forced out of power by the pressures of the Great Depression, and within a short period of time, prime ministers were replaced one after another. Even more dramatic and decisive for the fate of mankind was Hitler's rise to power in Germany. Because Hitler was able to solve the problem of unemployment, many Germans embraced him at the beginning, not realizing that their Führer would lead them down a different path. Crisis after crisis later led to the Second World War.