USSR Birth & 1929 Stock Market Crash: Key Events

The Birth of the USSR

The New Regime: First Steps

The Council of People's Commissars issued a series of decrees aimed to satisfy the main demands of the masses and win their accession. These included:

• The decree on the end of the war proposed a peace without annexations or indemnities.
• The decree on land expropriated land without agricultural contracts.
• The decree on industrial factories put under the control of workers and employees.
• The decree on the nationalities declared the right of peoples to freely dispose of Russia.

In January 1918, the Constituent Assembly met. Soviet power and the dictatorship of the proletariat would become the pillars of Bolshevik Russia. Gradually, the opposition was silenced. In July 1918, the Congress of Soviets adopted the first constitution. Lenin advocated the need for peace at any price as the only way to ensure the permanence of the revolution. The pressure of the German army forced the Bolshevik Party and the government to accept the harsh conditions imposed by Germany. Peace was signed in the city of Brest-Litovsk on March 3, 1918.

The Crash of the New York Stock Exchange

What began as a simple drop in prices on the New York Stock Exchange became the biggest crisis in the history of capitalism. Since 1925, stock prices rose continuously, and New Yorkers accumulated benefits. The easy access to credit to buy shares on the stock market fueled speculation. The difference between the increasingly high price of the shares and the real activity of firms widened.

Evidence of underlying problems before 1929 had been numerous. Since 1925, the values of commodities declined, the UK's economic difficulties were obvious and had dragged the monetary system into a confusing situation, German industrial production was stagnant since 1927, and international commerce was going through a long period of sluggishness.

On Thursday, October 24, a very large number of shares went on sale as prices fell. The immediate trigger for the crisis of 1929 was the crash of the New York Stock Exchange. Panic took hold of investors who initiated a massive sale of securities, scuppering the interventions of certain banks to halt the decline of contributions through the purchase of shares. In two and a half years, Wall Street had reduced the value of their contributions to one-sixth of what it had been at the time of the crash. A slow recovery began just after 1933.