Great Depression of the 1929

8/12/2019 Great Depression of the 1929

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Great DepressionThis article is about the severe worldwide economic downturn in the 1930s. For other uses,see The Great Depression (disambiguationand The Great !lump (disambiguation.

Dorothea "ange#s $igrant $otherdepicts destitutepea pic%ersin &ali'ornia,centering onFlorence wens Thompson, age 3), a mother o' seven children, in*ipomo, &ali'ornia,$arch 193+

!- annual real GD 'rom 1910/+0, with the ears o' the Great Depression (19)9/1939highlighted.
http://en.wikipedia.org/wiki/The_Great_Depression_(disambiguation)http://en.wikipedia.org/wiki/The_Great_Slump_(disambiguation)http://en.wikipedia.org/wiki/Dorothea_Langehttp://en.wikipedia.org/wiki/Dorothea_Langehttp://en.wikipedia.org/wiki/Migrant_Motherhttp://en.wikipedia.org/wiki/Pea-pickershttp://en.wikipedia.org/wiki/Pea-pickershttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Florence_Owens_Thompsonhttp://en.wikipedia.org/wiki/Nipomo,_Californiahttp://en.wikipedia.org/wiki/Nipomo,_Californiahttp://en.wikipedia.org/wiki/File:US_GDP_10-60.jpghttp://en.wikipedia.org/wiki/File:US_GDP_10-60.jpghttp://en.wikipedia.org/wiki/File:Lange-MigrantMother02.jpghttp://en.wikipedia.org/wiki/File:Lange-MigrantMother02.jpghttp://en.wikipedia.org/wiki/The_Great_Slump_(disambiguation)http://en.wikipedia.org/wiki/Dorothea_Langehttp://en.wikipedia.org/wiki/Migrant_Motherhttp://en.wikipedia.org/wiki/Pea-pickershttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Florence_Owens_Thompsonhttp://en.wikipedia.org/wiki/Nipomo,_Californiahttp://en.wikipedia.org/wiki/The_Great_Depression_(disambiguation)


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The unemploment rate in the ! 1910/19+0, with the ears o' the Great Depression (19)9/1939 highlighted.

The Great Depressionwas a severe worldwide economic depressionin the decade precedingorld ar 22.The timing o' the Great Depression varied across nations, but in most countriesit started in 1930 and lasted until the late 1930s or middle 190s.4152t was the longest, deepest,and most widespread depression o' the )0th centur. 4)5

2n the )1st centur, the Great Depression is commonl used as an e6ample o' how 'ar theworld#s econom can decline.4)5The depression originated in the .!., a'ter the 'all in stoc%

prices that began around !eptember , 19)9, and became worldwide news with the stoc%mar%et crasho' ctober )9, 19)9 (%nown as 7lac% Tuesda.

The Great Depression had devastating e''ects in countries richandpoor.ersonal income, ta6

revenue, pro'its and prices dropped, while international trade plunged b more than 80.nemploment in the .!. rose to )8, and in some countries rose as high as 33. 435

&ities all around the worldwere hit hard, especiall those dependent on heav industr.&onstruction was virtuall halted in man countries. Farmingand rural areas su''ered as crop

prices 'ell b appro6imatel +0.454854+5Facing plummeting demand with 'ew alternate sourceso' :obs, areas dependent onprimar sector industriessuch as cash cropping, miningandloggingsu''ered the most.4;5

!ome economies started to recover b the mid


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).1.1.) $onetarist

).1.1.3 &ommon position

).1.) @eterodo6 theories

).1.).1 -ustrian !chool

).1.).) $ar6ist

o ).) !peci'ic theories o' cause

).).1 Debt de'lation

).).) Decline in productivit

).).3 7rea%down o' international trade

).). 2neAualit

).).8 roductivit shoc%

3 Turning point and recover

o 3.1 Gold standard

o 3.) orld ar 22 and recover

>''ects

o .1 -ustralia

o .) &anada

.).1 omen

o .3 &hile

o . &hina

o .8 France

o .+ German

o .; Bapan

o .= "atin -merica

o .9 *etherlands

o .10 ortugal

o .11 !outh -'rica

o .1) !oviet nion

o .13 !pain
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o .1 !weden

o .18 Thailand

o .1+ nited ?ingdom

o .1; nited !tates

8 "iterature

+ *aming

o +.1 ther Cgreat depressionsC

; &omparison with the lateconomic historians usuall attribute the start o' the Great Depression to the suddendevastating collapse o' ! stoc% mar%et prices on ctober )9, 19)9, %nown as 7lac%Tuesda495some dispute this conclusion, and see the stoc% crash as a smptom, rather than acause, o' the Great Depression.4354105

>ven a'ter the all !treet &rash o' 19)9, optimism persisted 'or some time Bohn D.

oc%e'ellersaid that CThese are das when man are discouraged. 2n the 93 ears o' m li'e,depressions have come and gone. rosperit has alwas returned and will again.C 4115The stoc%
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mar%et turned upward in earl 1930, returning to earl 19)9 levels b -pril. This was stillalmost 30 below the pea% o' !eptember 19)9.41)5

Together, government and business spent more in the 'irst hal' o' 1930 than in thecorresponding period o' the previous ear. n the other hand, consumers, man o' whom had

su''ered severe losses in the stoc% mar%et the previous ear, cut bac% their e6penditures b tenpercent. "i%ewise, beginning in mid


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&rowd gathering at the intersection o' all !treetand 7road !treet a'ter the 19)9 crash

There were multiple causes 'or the 'irst downturn in 19)9. These include the structural

wea%nesses and speci'ic events that turned it into a ma:or depression and the manner in whichthe downturn spread 'rom countr to countr. 2n relation to the 19)9 downturn, historiansemphasiHe structural 'actors li%e ma:or ban% 'ailures and the stoc% mar%et crash. 2n contrast,monetarist economists (such as7arr >ichengreen, $ilton Friedmanand eter Temin pointto monetar 'actors such as actions b the ! Federal eservethat contracted the monesuppl, as well as 7ritain#s decision to return to thegold standardat pre/orld ar 2 parities(!I.=+EJ1.

ecessions andbusiness cclesare thought to be a normal part o' living in a world o' ine6actbalances between suppl and demand. hat turns a normal recession or #ordinar# businessccle into a depression is a sub:ect o' much debate and concern. !cholars have not agreed on

the e6act causes and their relative importance. The search 'or causes is closel connected tothe issue o' avoiding 'uture depressions. - related Auestion is whether the Great Depressionwas primaril a 'ailure on the part o' 'ree mar%etsor a 'ailure o' government e''orts toregulateinterest rates, curtail widespread ban% 'ailures, and control the mone suppl.

&urrent theories ma be broadl classi'ied into two main points o' view and several heterodo6points o' view. There are demand


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There are also various heterodo6 theoriesthat downpla or re:ect the e6planations o' the?enesians and monetarists. For e6ample, some new classical macroeconomistshave arguedthat various labor mar%et policies imposed at the start caused the length and severit o' theGreat Depression. The -ustrian school o' economics'ocuses on the macroeconomice''ects o'mone suppl, and howcentral ban%ingdecisions can lead to over


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budget. -ccording to the ?enesians, this improved the econom, but oosevelt never spentenough to bring the econom out o' recession until the start o' orld ar 22.4185

!onetarist

&rowd at *ew Lor%#s -merican nion 7an% during aban% runearl in the Great Depression.

$onetarists, including $ilton Friedman, argue that the Great Depression was mainl causedb monetar contraction,the conseAuence o' poor polic


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>6ecutive rder +10)ma%ing the private ownership o' gold certi'icates, coins and bullionillegal, reducing the pressure on Federal eserve gold. 4)15

Common position

From the point o' view o' toda#s mainstream schools o' economic thought, governmentshould strive to %eep the interconnected macroeconomic aggregates mone supplandKoraggregate demandon a stable growth path. hen threatened b the 'orecast o' a depressioncentral ban%sshould pour liAuidit into the ban%ing sstem and the government should cutta6es and accelerate spending in order to %eep the nominal mone stoc% and total nominaldemand 'rom collapsing.4))52n contrast in the 19)0s leave


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tightened in 19)=, it was 'ar too late and, in the -ustrian view, a signi'icant economiccontraction was inevitable.4)=52n Februar 19)9 @ae% published a paper predicting theFederal eserve#s actions would lead to a crisis starting in the stoc% and credit mar%ets. 4)95-ccording to the -ustrians, the arti'icial inter'erence in the econom was a disaster prior tothe Depression, and government e''orts to prop up the econom a'ter the crash o' 19)9 onl

made things worse.

-ccording to othbard, government intervention delaed the mar%et#s ad:ustment and madethe road to complete recover more di''icult.4305@owever, @ae%, unli%e othbard, also

believed, along with the monetarists, that the Federal eserve 'urther contributed to theproblems o' the Depression b permitting the mone suppl to shrin% during the earliest earso' the Depression.4315

!arist

?arl $ar6saw recession and depression as unavoidable under 'ree


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&rowds outside the7an% o' nited !tatesin *ew Lor% a'ter its 'ailure in 1931

During the &rash o' 19)9 preceding the Great Depression, margin reAuirements were onl10.4357ro%erage 'irms, in other words, would lend I9 'or ever I1 an investor haddeposited. hen the mar%et 'ell, bro%erscalled in these loans, which could not be paid bac%.4385

7an%s began to 'ail as debtors de'aulted on debt and depositors attempted to withdraw theirdeposits en masse, triggering multipleban% runs.Government guarantees and Federal eserve

ban%ing regulations to prevent such panics were ine''ective or not used. 7an% 'ailures led tothe loss o' billions o' dollars in assets.4385

utstanding debts became heavier, because prices and incomes 'ell b )0/80 but the debtsremained at the same dollar amount. -'ter the panic o' 19)9, and during the 'irst 10 months o'1930, ; ! ban%s 'ailed. (2n all, 9,000 ban%s 'ailed during the 1930s. 7 -pril 1933,around I; billion in deposits had been 'roHen in 'ailed ban%s or those le't unlicensed a'ter the$arch 7an% @olida.43+5

7an% 'ailures snowballed as desperate ban%ers called in loans which the borrowers did nothave time or mone to repa. ith 'uture pro'its loo%ing poor, capital investmentandconstruction slowed or completel ceased. 2n the 'ace o' bad loans and worsening 'uture

prospects, the surviving ban%s became even more conservative in their lending.43857an%s builtup their capital reserves and made 'ewer loans, which intensi'ied de'lationar pressures. -vicious ccledeveloped and the downward spiral accelerated.

The liAuidation o' debt could not %eep up with the 'all o' prices which it caused. The masse''ect o' the stampede to liAuidate increased the value o' each dollar owed, relative to thevalue o' declining asset holdings. The ver e''ort o' individuals to lessen their burden o' debte''ectivel increased it. arado6icall, the more the debtors paid, the more the owed. 4335Thissel'


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This stud suggests that theories o' the Great Depression have to e6plain an initial severedecline but rapid recover in productivit, relativel little change in the capital stoc%, and a

prolonged depression in the labor 'orce. This analsis re:ects theories that 'ocus on the role o'savings and posit a decline in the capital stoc%.

Brea*do+n o' international trade

$an economists have argued that the sharp decline in international trade a'ter 1930 helpedto worsen the depression, especiall 'or countries signi'icantl dependent on 'oreign trade.$ost historians and economists partl blame the -merican !mootccles. 2t held the econom produced more than it consumed,

because the consumers did not have enough income. Thus the uneAual distribution o' wealththroughout the 19)0s caused the Great Depression.4154)5

-ccording to this view, the root causeo' the Great Depression was a global over


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and &atchings recommended435'ederal and state governments start large constructionpro:ects, a program 'ollowed b @oover and oosevelt.

.roducti)ity shoc*

2t cannot be emphasiHed too strongl that the 4productivit, output and emploment5 trendswe are describing are long


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There is no consensus among economists regarding the motive 'orce 'or the .!. economice6pansion that continued through most o' the oosevelt ears (and the 193; recession thatinterrupted it. The common view among most economists is that oosevelt#s*ew Deal

policies either caused or accelerated the recover, although his policies were never aggressiveenough to bring the econom completel out o' recession. !ome economists have also called

attention to the positive e''ects 'rom e6pectations o' re'lationand rising nominal interest ratesthat oosevelt#s words and actions portended.4;54=52t was the rollbac% o' those samere'lationar policies that led to the interrupting recession o' 193;.4954805ne contributing

polic that reversed re'lation was the 7an%ing -ct o' 1938, which e''ectivel raised reservereAuirements, causing a monetar contraction that helped to thwart the recover. 4815GDreturned to its upward trend in 193=.

-ccording to &hristina omer, the mone suppl growth caused b huge international goldin'lows was a crucial source o' the recover o' the nited !tates econom, and that theeconom showed little sign o' sel'


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!eptember 1931 the 7an% o' >nglandceased e6changing pound notes 'or gold and the poundwas 'loated on 'oreign e6change mar%ets.

Great 7ritain, Bapan, and the !candinavian countries le't the gold standard in 1931. thercountries, such as 2tal and the .!., remained on the gold standard into 193) or 1933, while a

'ew countries in the so


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-n impoverished -merican 'amil living in a shant, 193+

The ma:orit o' countries set up relie' programs, and most underwent some sort o' politicalupheaval, pushing them to the le't or right. 2n some states, the desperate citiHens turnedtoward nationalist demagoguerQ in'amousl propelling -dol' @itlerto power in German

Q setting the stage 'or orld ar 22.

&ustralia

$ain articleEGreat Depression in -ustralia

-ustralia#s dependence on agricultural and industrial e6portsmeant it was one o' the hardestconometric studies have identi'ied the 'iscal stimulus as especiall e''ective.4;5

The devaluation o' the currenc had an immediate e''ect. Bapanese te6tiles began to displace7ritish te6tiles in e6port mar%ets. The de'icit spending proved to be most pro'ound. Thede'icit spending went into the purchase o' munitions 'or the armed 'orces. 7 1933, Bapanwas alread out o' the depression. 7 193, Ta%ahashi realiHed that the econom was indanger o' overheating, and to avoid in'lation, moved to reduce the de'icit spending that wenttowards armaments and munitions.

This resulted in a strong and swi't negative reaction 'rom nationalists, especiall those in thearm, culminating in his assassination in the course o' the Februar )+ 2ncident. This had achilling e''ecton all civilian bureaucrats in the Bapanese government. From 193, themilitar#s dominance o' the government continued to grow. 2nstead o' reducing de'icitspending, the government introduced price controls and rationing schemes that reduced, butdid not eliminate in'lation, which would remain a problem until the end o' orld ar 22.

The de'icit spending had a trans'ormative e''ect on Bapan. Bapan#s industrial productiondoubled during the 1930s. Further, in 19)9 the list o' the largest 'irms in Bapan was dominated

b light industries, especiall te6tile companies (man o' Bapan#s automa%ers, li%e Toota,

have their roots in the te6tile industr. 7 190 light industrhad been displaced b heavindustr as the largest 'irms inside the Bapanese econom. 4;85

atin &merica

$ain articleEGreat Depression in "atin -merica

7ecause o' high levels o' .!. investment in "atin -merican economies, the were severeldamaged b the Depression. ithin the region,&hile,7oliviaand eruwere particularl

badl a''ected.

etherlands

$ain articleEGreat Depression in the *etherlands

From roughl 1931/193;, the*etherlandssu''ered a deep and e6ceptionall long depression.This depression was partl caused b the a'ter


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.ortugal

$ain articleE>conom o' ortugal

-lread under the rule o' a dictatorial :unta, the Ditadura *acional, ortugal su''ered no

turbulent political e''ects o' the Depression, although -ntonio de liveira !alaHar, alreadappointed $inister o' Finance in 19)= greatl e6panded his powers and in 193) rose to rime$inister o' ortugalto 'ound the >stado *ovo, an authoritariancorporatistdictatorship.

ith the budget balanced in 19)9, the e''ects o' the depression were rela6ed through harshmeasures towardsbudget balanceand autar%,causing social discontent but stabilit and,eventuall, an impressive economic growth. The regime outlived !alaHar himsel' be'ore beingoverthrown in the &arnation evolutionin 19;, initiating a road towards the restoration o'democrac.

South &'rica

$ain articleEGreat Depression in !outh -'rica

-s world trade slumped, demand 'or !outh -'rican agricultural and mineral e6ports 'elldrasticall. The&arnegie &ommission on oor hiteshad concluded in 1931 that nearl onethird o'-'ri%anerslived aspauper. 2t is believed that the social discom'ort caused b thedepression was a contributing 'actor in the 1933 split between the CgesuiwerdeC (puri'ied andCsmelterC ('usionist 'actions within the*ational artand the *ational art#s subseAuent'usion with the !outh -'rican art.4;;5>ventuall, the gesuiwerde 'action o' Daniel $alanwould go on to 'orm its own part and ta%e over the government a'ter the 19= election,

bringing about the doctrine o' apartheid, instituting and e6tending racial segregation, whichwould see an end onl in 199.

So)iet Union

The !oviet nion was the world#s sole communist statewith ver little international trade. -tthe time o' the Depression, the !oviet econom was growing steadil, 'ueled b intensiveinvestment in heav industr. The apparent economic success o' the !oviet nion at a timewhen the capitalist world was in crisis led man estern intellectuals to view the !ovietsstem 'avorabl. Benni'er 7urns wrote, C-s the Great Depression ground on andunemploment soared, intellectuals began un'avorabl comparing their 'altering capitalist

econom to ussian &ommunism. ... $ore than ten ears a'ter the evolution, &ommunismwas 'inall reaching 'ull 'lower, according to the *ew Lor% Times reporter alter Durant, a!talin 'an who vigorousl debun%ed accounts o' the%raine 'amine, a manconom o' !pain

The Depression in !pain e6acerbated political and economic crises that led ultimatel to the!panish &ivil ar. The dictatorship o' rime $inister $iguel rimo de iveracollapsed1930 largel as a result o' the government#s inabilit to deal with the Depression. This was'ollowed b the ousting o' ?ing-l'onso 222in the 'ollowing ear, creating a !econd
http://en.wikipedia.org/wiki/Economy_of_Portugalhttp://en.wikipedia.org/wiki/Economy_of_Portugalhttp://en.wikipedia.org/wiki/Ditadura_Nacionalhttp://en.wikipedia.org/wiki/Antonio_de_Oliveira_Salazarhttp://en.wikipedia.org/wiki/Prime_Minister_of_Portugalhttp://en.wikipedia.org/wiki/Prime_Minister_of_Portugalhttp://en.wikipedia.org/wiki/Prime_Minister_of_Portugalhttp://en.wikipedia.org/wiki/Estado_Novo_(Portugal)http://en.wikipedia.org/wiki/Authoritarianhttp://en.wikipedia.org/wiki/Authoritarianhttp://en.wikipedia.org/wiki/Corporatisthttp://en.wikipedia.org/wiki/Budget_balancehttp://en.wikipedia.org/wiki/Budget_balancehttp://en.wikipedia.org/wiki/Autarkyhttp://en.wikipedia.org/wiki/Autarkyhttp://en.wikipedia.org/wiki/Carnation_Revolutionhttp://en.wikipedia.org/wiki/Great_Depression_in_South_Africahttp://en.wikipedia.org/wiki/Great_Depression_in_South_Africahttp://en.wikipedia.org/wiki/Carnegie_Commission_of_Investigation_on_the_Poor_White_Question_in_South_Africahttp://en.wikipedia.org/wiki/Carnegie_Commission_of_Investigation_on_the_Poor_White_Question_in_South_Africahttp://en.wikipedia.org/wiki/Afrikanerhttp://en.wikipedia.org/wiki/Afrikanerhttp://en.wikipedia.org/wiki/Pauperhttp://en.wikipedia.org/wiki/National_Party_(South_Africa)http://en.wikipedia.org/wiki/National_Party_(South_Africa)http://en.wikipedia.org/wiki/National_Party_(South_Africa)http://en.wikipedia.org/wiki/South_African_Partyhttp://en.wikipedia.org/wiki/Great_depression#cite_note-77http://en.wikipedia.org/wiki/Daniel_Malanhttp://en.wikipedia.org/wiki/South_African_general_election,_1948http://en.wikipedia.org/wiki/Apartheidhttp://en.wikipedia.org/wiki/Communist_statehttp://en.wikipedia.org/wiki/Walter_Durantyhttp://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%931933http://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%931933http://en.wikipedia.org/wiki/Great_depression#cite_note-78http://en.wikipedia.org/wiki/Economy_of_Spainhttp://en.wikipedia.org/wiki/Economy_of_Spainhttp://en.wikipedia.org/wiki/Spanish_Civil_Warhttp://en.wikipedia.org/wiki/Miguel_Primo_de_Riverahttp://en.wikipedia.org/wiki/Alfonso_XIII_of_Spainhttp://en.wikipedia.org/wiki/Alfonso_XIII_of_Spainhttp://en.wikipedia.org/wiki/Second_Spanish_Republichttp://en.wikipedia.org/wiki/Economy_of_Portugalhttp://en.wikipedia.org/wiki/Ditadura_Nacionalhttp://en.wikipedia.org/wiki/Antonio_de_Oliveira_Salazarhttp://en.wikipedia.org/wiki/Prime_Minister_of_Portugalhttp://en.wikipedia.org/wiki/Prime_Minister_of_Portugalhttp://en.wikipedia.org/wiki/Estado_Novo_(Portugal)http://en.wikipedia.org/wiki/Authoritarianhttp://en.wikipedia.org/wiki/Corporatisthttp://en.wikipedia.org/wiki/Budget_balancehttp://en.wikipedia.org/wiki/Autarkyhttp://en.wikipedia.org/wiki/Carnation_Revolutionhttp://en.wikipedia.org/wiki/Great_Depression_in_South_Africahttp://en.wikipedia.org/wiki/Carnegie_Commission_of_Investigation_on_the_Poor_White_Question_in_South_Africahttp://en.wikipedia.org/wiki/Afrikanerhttp://en.wikipedia.org/wiki/Pauperhttp://en.wikipedia.org/wiki/National_Party_(South_Africa)http://en.wikipedia.org/wiki/South_African_Partyhttp://en.wikipedia.org/wiki/Great_depression#cite_note-77http://en.wikipedia.org/wiki/Daniel_Malanhttp://en.wikipedia.org/wiki/South_African_general_election,_1948http://en.wikipedia.org/wiki/Apartheidhttp://en.wikipedia.org/wiki/Communist_statehttp://en.wikipedia.org/wiki/Walter_Durantyhttp://en.wikipedia.org/wiki/Soviet_famine_of_1932%E2%80%931933http://en.wikipedia.org/wiki/Great_depression#cite_note-78http://en.wikipedia.org/wiki/Economy_of_Spainhttp://en.wikipedia.org/wiki/Spanish_Civil_Warhttp://en.wikipedia.org/wiki/Miguel_Primo_de_Riverahttp://en.wikipedia.org/wiki/Alfonso_XIII_of_Spainhttp://en.wikipedia.org/wiki/Second_Spanish_Republic


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!panish epublicthat had to grapple with the same social and economic problems. >conomicinstabilit and political stri'e continued, and a'ter the divisive general election o' 193+theclimate o' violent antagonism between "e't and ight e6panded into the !panish &ivil ar.

S+eden

$ain articleE>conom o' !weden

Ta%ing place in the midst o' a shortngland, the e''ects were short


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boom in the motor car industr was helped b a growing southern population and ane6panding middle class. -griculture also saw a boom during this period.4=35

!ee alsoE*orth/!outh divide in the nited ?ingdom

United States

$ain articlesE Great Depression in the nited !tatesand*ew Deal

nemploed men Aueued outside a depression soup %itchen opened in &hicago b -l &apone,1931

@ooverOs 'irst measures to combat the depression were based on voluntarism b businessesnot to reduce their wor%'orce or cut wages. 7ut businesses had little choice and wages werereduced, wor%ers were laid o'', and investments postponed. 4=5

2n Bune 1930 &ongress approved the !moot/@awle Tari'' -ctwhich raised tari''s onthousands o' imported items. The intent o' the -ct was to encourage the purchase o'-merican- which included 'unds 'orpublic wor%s

programs such as dams and the creation o' the econstruction Finance &orporation(F& in193). The econstruction Finance &orporation was a Federal agenc with the authorit tolend up to I) billion to rescue ban%s and restore con'idence in 'inancial institutions. 7ut
http://en.wikipedia.org/wiki/Middle_classhttp://en.wikipedia.org/wiki/Great_depression#cite_note-Social_Conditions_in_Britain_1918-1939-83http://en.wikipedia.org/wiki/North%E2%80%93South_divide_in_the_United_Kingdomhttp://en.wikipedia.org/wiki/Great_Depression_in_the_United_Stateshttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/Al_Caponehttp://en.wikipedia.org/wiki/Great_depression#cite_note-Peter_Clemens_1954.2C_p._114-84http://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Acthttp://en.wikipedia.org/wiki/Great_depression#cite_note-85http://en.wikipedia.org/w/index.php?title=National_Credit_Corporation&action=edit&redlink=1http://en.wikipedia.org/wiki/Great_depression#cite_note-86http://en.wikipedia.org/wiki/Great_depression#cite_note-86http://en.wikipedia.org/wiki/Great_depression#cite_note-87http://en.wikipedia.org/wiki/Bonus_Armyhttp://en.wikipedia.org/wiki/Great_depression#cite_note-88http://en.wikipedia.org/wiki/Great_depression#cite_note-89http://en.wikipedia.org/wiki/Great_depression#cite_note-90http://en.wikipedia.org/wiki/Great_depression#cite_note-91http://en.wikipedia.org/wiki/Shanty_townhttp://en.wikipedia.org/wiki/Hoovervillehttp://en.wikipedia.org/wiki/Great_depression#cite_note-92http://en.wikipedia.org/wiki/Federal_Home_Loan_Bank_Acthttp://en.wikipedia.org/wiki/Federal_Home_Loan_Bank_Acthttp://en.wikipedia.org/wiki/Emergency_Relief_and_Construction_Acthttp://en.wikipedia.org/wiki/Emergency_Relief_and_Construction_Acthttp://en.wikipedia.org/wiki/Public_workshttp://en.wikipedia.org/wiki/Reconstruction_Finance_Corporationhttp://en.wikipedia.org/wiki/File:Evictbonusarmy.jpghttp://en.wikipedia.org/wiki/File:Evictbonusarmy.jpghttp://en.wikipedia.org/wiki/File:Unemployed_men_queued_outside_a_depression_soup_kitchen_opened_in_Chicago_by_Al_Capone,_02-1931_-_NARA_-_541927.jpghttp://en.wikipedia.org/wiki/Middle_classhttp://en.wikipedia.org/wiki/Great_depression#cite_note-Social_Conditions_in_Britain_1918-1939-83http://en.wikipedia.org/wiki/North%E2%80%93South_divide_in_the_United_Kingdomhttp://en.wikipedia.org/wiki/Great_Depression_in_the_United_Stateshttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/Al_Caponehttp://en.wikipedia.org/wiki/Great_depression#cite_note-Peter_Clemens_1954.2C_p._114-84http://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Acthttp://en.wikipedia.org/wiki/Great_depression#cite_note-85http://en.wikipedia.org/w/index.php?title=National_Credit_Corporation&action=edit&redlink=1http://en.wikipedia.org/wiki/Great_depression#cite_note-86http://en.wikipedia.org/wiki/Great_depression#cite_note-87http://en.wikipedia.org/wiki/Bonus_Armyhttp://en.wikipedia.org/wiki/Great_depression#cite_note-88http://en.wikipedia.org/wiki/Great_depression#cite_note-89http://en.wikipedia.org/wiki/Great_depression#cite_note-90http://en.wikipedia.org/wiki/Great_depression#cite_note-91http://en.wikipedia.org/wiki/Shanty_townhttp://en.wikipedia.org/wiki/Hoovervillehttp://en.wikipedia.org/wiki/Great_depression#cite_note-92http://en.wikipedia.org/wiki/Federal_Home_Loan_Bank_Acthttp://en.wikipedia.org/wiki/Emergency_Relief_and_Construction_Acthttp://en.wikipedia.org/wiki/Public_workshttp://en.wikipedia.org/wiki/Reconstruction_Finance_Corporation


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I) billion was not enough to save all the ban%s, andban% runsand ban% 'ailures continued.4=5Vuarter b Auarter the econom went downhill, as prices, pro'its and emploment 'ell,leading to thepolitical realignmentin 193) that brought to power Fran%lin Delano oosevelt.

7uried machiner in a barn lot !outh Da%ota, $a 193+. TheDust 7owlon the Great lainscoincided with the Great Depression4935

!hortl a'ter resident Fran%lin Delano ooseveltwas inaugurated in 1933, drought anderosion combined to cause the Dust 7owl, shi'ting hundreds o' thousands o'displaced

personso'' their 'arms in the $idwest. From his inauguration onward, oosevelt argued thatrestructuring o' the econom would be needed to prevent another depression or avoid

prolonging the current one. *ew Deal programs sought to stimulate demandand provide wor%and relie' 'or the impoverished through increased government spending and the institution o''inancial re'orms.

During a Cban% holidaC that lasted 'ive das, the>mergenc 7an%ing -ctwas signed intolaw. 2t provided 'or a sstem o' reopening sound ban%s under Treasursupervision, with

'ederal loans available i' needed. The !ecurities -ct o' 1933comprehensivel regulated thesecurities industr. This was 'ollowed b the !ecurities >6change -ct o' 193which createdthe!ecurities and >6change &ommission. Though amended, %e provisions o' both -cts arestill in 'orce. Federal insurance o'ban% depositswas provided b theFD2&, and the Glass/!teagall -ct.

The-gricultural -d:ustment -ctprovided incentives to cut 'arm production in order to raise'arming prices. The*ational ecover -dministration(*- made a number o' sweepingchanges to the -merican econom. 2t 'orced businesses to wor% with government to set pricecodes through the *- to 'ightde'lationarCcut


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&&&wor%ers constructing road, 1933. ver 3 million unemploed oung men were ta%en outo' the cities and placed into )+00 wor% camps managed b the &&&495

These re'orms, together with several other relie' and recover measures, are called the First*ew Deal.>conomic stimulus was attempted through a new alphabet soup o' agenciesset upin 1933 and 193 and previousl e6tant agencies such as the econstruction Finance&orporation. 7 1938, the C!econd *ew DealC added!ocial !ecurit(which was laterconsiderabl e6tended through theFair Deal, a :obs program 'or the unemploed (the or%srogress -dministration, - and, through the*ational "abor elations 7oard, a strongstimulus to the growth o' labor unions. 2n 19)9, 'ederal e6penditures constituted onl 3 o'theGD. The national debt as a proportion o' G* rose under @oover 'rom )0 to 0.oosevelt %ept it at 0 until the war began, when it soared to 1)=.

7 193+, the maineconomic indicatorshad regained the levels o' the late 19)0s, e6cept 'orunemploment, which remained high at 11, although this was considerabl lower than the)8 unemploment rate seen in 1933. 2n the spring o' 193;, -merican industrial production

e6ceeded that o' 19)9 and remained level until Bune 193;. 2n Bune 193;, the ooseveltadministration cut spending and increased ta6ation in an attempt to balance the 'ederalbudget.4985The -merican econom then too% a sharp downturn, lasting 'or 13 months throughmost o' 193=. 2ndustrial production 'ell almost 30 per cent within a 'ew months and

production o' durable goods'ell even 'aster. nemploment :umped 'rom 1.3 in 193; to19.0 in 193=, rising 'rom 8 million to more than 1) million in earl 193=.49+5$anu'acturingoutput 'ell b 3; 'rom the 193; pea% and was bac% to 193 levels.49;5

-emploed )/3 million unemploed at uns%illed labor

roducers reduced their e6penditures on durable goods, and inventories declined, but personalincome was onl 18 lower than it had been at the pea% in 193;. -s unemploment rose,

consumers# e6penditures declined, leading to 'urther cutbac%s in production. 7 $a 193=retail sales began to increase, emploment improved, and industrial production turned up a'ter
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Bune 193=.49=5-'ter the recover 'rom the ecession o' 193;/193=, conservatives were able to'orm a bipartisan conservative coalitionto stop 'urther e6pansion o' the *ew Deal and, whenunemploment dropped to ) in the earl 190s, the abolished -, &&& and the -relie' programs. !ocial !ecurit remained in place.

7etween 1933 and 1939, 'ederal e6penditure tripled, and oosevelt#s critics charged that hewas turning -merica into asocialiststate.4995The Great Depression was a main 'actor in theimplementation o' social democracandplanned economiesin >uropean countries a'terorld ar 22 (see$arshall lan. ?enesianism remained the most in'luential economicschool until the 19;0s, when $ilton Friedman and other economists propagated$onetarismas an alternative approach.41005

iterature

-nd the great owners, who must lose their land in an upheaval, the great owners with access to histor,with ees to read histor and to %now the great 'actE when propert accumulates in too 'ew hands it is ta%enawa. -nd that companion 'actE when a ma:orit o' the people are hungr and cold the will ta%e b 'orcewhat the need. -nd the little screaming 'act that sounds through all historE repression wor%s onl tostrengthen and %nit the repressed.

/Bohn !teinbec%,The Grapes o' rath41015

The Great Depression has been the sub:ect o' much writing, as authors have sought toevaluate an era that caused 'inancial as well as emotional trauma. erhaps the mostnoteworth and 'amous novel written on the sub:ect is The Grapes o' rath, published in1939 and written b Bohn !teinbec%,who was awarded both the*obel riHe'or literature andtheulitHer riHe'or the wor%. The novel 'ocuses on a poor 'amil o' sharecroppers who are

'orced 'rom their home as drought, economic hardship, and changes in the agriculturalindustroccur during the Great Depression. !teinbec%#s ' $ice and $enis anotherimportant novel about a :ourne during the Great Depression. -dditionall, @arper "ee#s To?ill a $oc%ingbirdis set during the Great Depression. $argaret -twood#s 7oo%er priHe

Documents

Great Depression of the 1929