Today is Social Sciences class we have done many things:
First of all we have corrected three exercises that Paqui gave us the last Thursday. Maria has corrected the first exercise. In this exercise we have to explain the situation of the USA after WW1.
The situation of the USA after WW1 was the following one: the USA became the most important economic power in the world and the most important creditor of the Europeans countries. The American way of life became a model. The USA attracted thousand of immigrants and consumer society spread thanks to the installments and credits. There was a huge demand for all kind of products:
- Farmers bought lands to increase production
- Industries asked for credits to expand their business
- A lot of houses and apartments were built and quickly sold
- Many people invested in stock exchange markets due to the facilities the banks gave to get a credit.
As there was a huge demand, prices increased constantly, even if there was no correspondence between the price of the stocks and the way companies worked.
The second exercise has consisted of explaining the causes of the 1929 economic crisis in the USA.
The 1929 crisis started when the Europeans countries started recovering,there was a contraction of the demand for USA products and an overproduction crisis started:
- Products couldn't be sold
- Stocks started accumulating and as everyone wanted to sell their stocks, prices decressed and they lost a lot of money.
- Industries couldn't sell their products, so they had to dismiss workers (unemployment rate increased).
- Farmers couldn't give their loans back to the banks.
The last exercise consisted of explaining the event that is considered to be the outbreak of the 1929. Marta has corrected this exercise.
Outbreak of 1992's crisis: The public evidence of the crisis came on the 24th October 1929 (Black Friday), when the price of stocks in Wall Street (New York Stock Exchange Market) fell down.
The stockholders panicked and tried to sell their stocks massively. Prices shrunk, many investors got ruined and they couldn't give their loans back. Banks crashed down and economy collapsed. When the USA banks asked the European banks for the money they had lent them before, the crisis spread to Europe and the Great Depression become a world problem.
The picture that is above is representing two men searching for job. Paqui has said us that they had written like a curriculum, because in it that time was very difficult to find a job.
This is the famous Central Park in 1929. It was full of shanties because the people that couldn't pay the loans lost their houses and they started to live there.
Then we have spoken about how the banks work. Paqui has given an example to make me understand why banks collapsed in that period. She has told me that when a person deposits money in a bank, this money doesn't remain there untouchable, that money is given to another people. So this happened in 1929 in the USA the people who didn't invest money in stock they lost their money because the banks couldn't give them their money back.So there were a lot of people queuing to recover their money, like in the next picture.
Then we have seen a graphic about how unemployment rate grow in that period
Paqui has told us that nowatdays Spain has reached the top of unemployment rate.
Then in the last 5 minutes of the class Paqui has started to explain us why the crisis became more serious, but she hasn't finished it, because the bell has rung.
And as always we have copied some words on the glossary:
- interest rate: tasas de interés
- to going into debts:endeudarse
- to get ride of something:deshacerse de
- to go bankrupt: quebrar/ir a la bancarota
- vicious circle:círculo vicioso
- shanty :chabola
- shanty town:poblado chabolista
And that's all for today! Now I've to go to study Biology! See you on Thursday.