Describe the effects of the Great Depression on the US
Two crucial influences that shaped post-war reconstruction were as mentioned below : The first was the US’s emergence as the dominant economic, political and military power in the western world. The second was the dominance of the Soviet Union. It had made huge sacrifices to defeat Nazi Germany, and transformed itself from a backward agricultural country to a world power during the very years when the capitalist world was trapped in the Great Depression.
Major effects of the Great Depression on the US were as given below : There was fall in prices. US banks and loans : US banks reduced domestic lending and asked people to return their loans. People, however, could not repay the loans due to lesser incomes. They were forced to give up their homes, cars and other consumer durables. Unemployment: Unemployment increased. People trudged long distances looking for any work they could find. Collapse of US banking system : US banking system collapsed as it could not recover loans and repay depositors. Thousands of banks went bankrupt and were closed. By 1933, over 4,000 banks had closed. Between 1929 and 1932 about 1,10,000 companies had collapsed.
