8.4 The Great Depression

• World economy began to slow

  Late 1920s
• Causes of economic slowdown


  1. Work became harder to find

  2. Companies producing large quantities of consumer goods could no longer find people to buy them

  3. Prices for mass-produced consumer goods and agricultural staples dropped worldwide

  4. Unemployment began to rise in many industrialised nations
• Collapse of the New York stock exchange

  1929
• Great Depression


  Period of severe economic downturn and hardship following the events of the late 1920s
• New York stock market in the 1920s


  • Popular place for people to invest money
  • Shares could be bought on credit and sold for profit when prices rose
  • By late 1920s, share prices became inflated and pushed to unreasonable highs
• Stock market crash


  1. Number of shareholders began to lose confidence and sell shares

  2. Prices fell rapidly and the market crashed

  3. Many investors, stockbrokers and business owners lost everything
• Confidence in the economy evaporated


  Businesses closed down and unemployment grew
• Workers lost jobs or had wages severely slashed


  They bought less, which then led to further cutbacks in production and jobs
• Governments seemed powerless to stop their economies spiralling out of control and poverty spread
• American economy collapsed


  1929
• Two-thirds of world trading ceased almost overnight
• Almost 50,000 Australians found themselves unemployed
• By 1932, around 32 per cent of all Australians were out of work
• Impact of Great Depression on Australian society

  • Many people lost their homes and were forced to live in substandard housing
  • Shanty towns sprang up on the edges of major cities
  • Men took to the roads in search of jobs
  • Children and women became the main breadwinners
  • Soup kitchens and charity groups did their best to feed the starving and destitute
  • Soldiers who had returned home were often hit the hardest, with many becoming homeless and the suicide rate increasing dramatically
• Government relief for the unemployed

  1. Sustenance payments ('susso')

  2. Granted only to the truly destitute

  3. Given in the form of food rations or coupons
• By 1932, more than 60,000 people depended on the susso merely to survive