3- THE GREAT DEPRESSION/ LA GRAN DEPRESIÓN 3.1- Causes of the depression/Causas de la depresión - After WWI, USA became the first economic power on the world. - The roaring twenties: were a period of economic prosperity in USA, it was characterized by consumerism, consumer society (household appliances, automobile, clothes...), urban growth (skyscraper), the modern culture: cinema, jazz age, Swing dance, art deco, fashion... - Stock market bubble: the consumption rise, workers began buying on credit, businessmen borrowed money (loans) from banks to buy stocks and after the sold them to earn more money (speculation). Finally, people did not have enough money to pay their debts or buy new items. - A crisis of Overproduction: it was produced more than people consumed, consequently the prices dropped so that farmers and companies went bankrupt.
3.2- The Wall Street crash of 1929/ El crack del 29 - Black Thursday: the market lost money and prices fell, the panic spread between investors. - Black Tuesday: prices continued falling, 16 million stocks were put on sale by investors to not lose their money but nobody bought them. At the end of the day the market had lost $30 billion.
3.3- The Depression/ La depresión - After stock market crash banks, companies and inverstors were bankrupted, they lost all their money invested on the market. - The consumption dropped, unemployment and poverty rised in all the country. - The international trade stopped and the crisis spread to Europe and other part of the world.
3.4- The New Deal/ El "New Deal" - F.D. Roosevelt became the new president of the USA in 1933. He took a program known as the New Deal, which were different projects and plans to provide relief for the people suffering and to stabilize the economy. - Economic reforms: Set up state-owned companies, help and control banks. Crisis. - Social reforms: Invest in public works to reduce unemployment through WPA (work progress administration) which also help poor people and train people to look for a job. - New Deal effects: with these reforms the consumption rise and the american economy grew, but only after the WWII USA did not overcome the crisis.