Wikilatief- You know, what plant is this?
Yes exactly this is wheat
Wheat and the fall of the United States economy during World War 1
And what are the interesting facts?
It turns out that wheat once sank the economies of the United States and the world for up to a decade.
The stretching of the American economy began during the outbreak of World War I in 1914 - 1918.
When mainland Europe was hit by a major war and caused wheat production to be disrupted, wheat demand exploded to meet the food needs of soldiers, and the inhabitants of war-torn Europe.
Read Too : 10 facts of the history of the United States of America
Wheat prices increased dramatically from US$ 0.78 per bushel in 1913, to US$ 2.12 per bushel in 1917. Rising wheat prices have made wheat growers in Kansas, America a blessing.
The loosening of credit requirements due to adequate money supply and low interest rates, made farmers start taking out loans aggressively to develop their wheat plantations.
Soaring land demand for wheat plantations is making land prices soar. This triggered land speculators to co-buy the land for speculation. This makes other property prices also skyrocket.
The share prices of wheat and property companies also skyrocketed, provoking massive speculation in the stock market.
Soaring share and property prices are making their incomes soar. This triggered demand for other goods and services also to soar.
Read Too : How did the British clothes in 1600-1700?
In those days factories were also more productive with new technologies, so production activities also squirmed and gave rise to oversupply of industrial goods such as wheat, iron, and steel.
No wonder that during the 1920s, the American Economy squirmed and was nicknamed The Roaring Twenties.
Soaring stock prices are scoring new rich people. This period is also referred to as the time of easy money, and there is a nickname that everyone will become rich.
They bought shares not based on the company's fundamentals, but because of speculation.
 |
| The U.S. economy is squirming in the roaring 20s |
Entering the late 1920s, Europe improved and their economic activities began to run again. This caused a drastic drop in demand for American wheat and wheat prices also slumped.
As a result, many wheat farmers who experienced overproduction suffered heavy losses and were unable to pay off bank loans.
Bad credit numbers also soared. Much wheat plantation and banking companies lost money due to the slump in capital banks until their shares fell.
This certainly spread to other stocks, the stock market crash began.
As a result of falling wheat demand, the U.S. economy contracted to a decade-long depression.
Impact of the Great Depression
 |
| Workers who were laid off during the Great Depression are persistently looking for work |
The Great Depression of the 1930s caused workers to lose their savings due to the large number of failed and liquidated banks, and their investments in the stock market were also destroyed.
Their savings during work have been depleted by the slump in asset values. Meanwhile, they are also laid off, making their condition more difficult.
By November 1933, the unemployment rate in the United States had reached a record high of 25%, it is estimated that 15 million people had lost their jobs.
In fact, in some countries, the unemployment rate jumped to more than 30%. Food prices also fell by about 60%. About 5000 banks in America collapsed and had to close.
How Did America and the World Rise from Crisis?
When Franklin Delano Roosevelt was elected President of the United States in 1932, he designed economic improvements with his New Deal program.
The program contains 47 programs run in 3 stages from 1933-1939, aimed at stabilizing financial markets, job creation, union formation, and unemployment benefits.
 |
| Unemployment rate declines during World War II outbreak |
In addition to the ratification of the New Deal policy, the outbreak of World War II is also thought to have helped America and the world out of this crisis. This war sucked up a lot of manpower for the military.
Government spending on war increased fivefold from 1939 to 1944. Rising aggregate demand has pushed economic activity up to double.
Read Too : The history of French becoming an international language before English
As a result, the unemployment rate declined from 17% in 1939, to only about 1% in 1944 (the lowest figure in the history of the United States).