For the West, the 1920s was a time of wealth and excess. After the traumatic experience of World War I, there followed a period of prosperity with distinct cultural and economic changes in the countries of Central and Western Europe as well as the United States. In France the decade was known as the “années folles”, i.e. crazy years, while internationally the term “Roaring 20s” was used to characterize the era of “permanent happiness”.
Western countries experienced rapid industrial and economic growth. New trends were introduced in people’s lifestyles, such as the use of automobiles, telephones, the radio, and electrical appliances. The media began to feature athletes and stars of the then emerging cinema in their advertisements. The “crazy years” period, however, ended in 1929, when the Great Depression hit the US and Europe.
On Thursday, October 24, 1929, the “Black Thursday” of the New York Stock Exchange, the speculative bubble burst. On October 29, Wall Street’s “Black Tuesday,” investors sold approximately sixteen million shares of stock on the New York Stock Exchange in just one day. There was then panic selling on Wall Street. Stock prices plummeted and thousands of speculators were ruined. As a result of the crisis in the financial sector, industrial production and imports experienced a sharp decline. People lost their jobs and unemployment skyrocketed. Lenders began to demand the repayment of short-term loans, from which many European countries had benefited, including the defeated in World War I and debt-ridden Germany.
The Crash of the last days of October 1929 was commented on by the editors of “Kathimerini”. On October 30, the newspaper wrote: “The panic that occurred on the 23the October in the New York Stock Exchange, they received the extent of a real financial disaster. […] Such a terrible collapse was not observed even at the outbreak of the world war. The devaluation of values was caused by a group of speculators. It is estimated that in less than an hour, 2,600,000 shares were sold at a nominal loss of 120 billion drachmas.” Continuing, he said that “the panic continued the next day with a terrible consequence. Within a few hours, 10 million shares were sold, an unprecedented event for the New York Stock Exchange.
In the absence of an “institutional lender of last resort” whose decisive intervention would shorten the period of recession, Europe was plunged into a rapidly expanding financial disaster. In the early summer of 1930 there were 1.9 million unemployed in Germany alone. The average per capita income has fallen so people are spending less and less money. Even spending on the bare necessities was kept to a minimum. Countries that have tried to balance the budget by cutting government spending have failed miserably. Import restrictions and the concentration of states on domestic markets spread across the European continent. In 1932 the depression in Europe reached its worst point.
Column Editor: Myrto Katsigera, Vassilis Minakakis, Antigone-Despina Poimenidou, Athanasios Syroplakis
