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| Great Depression of the 1930s | |
|---|---|
| Name | Great Depression of the 1930s |
| Start | 1929 |
| End | 1939 |
| Causes | Stock Market Crash of 1929; banking failures; deflation; protectionism; commodity price collapse |
| Outcomes | High unemployment; New Deal reforms; protectionist trade; rearmament |
Great Depression of the 1930s The Great Depression of the 1930s was a worldwide economic downturn that began after the Stock Market Crash of 1929 and persisted through much of the 1930s, profoundly affecting United States industry, United Kingdom finance, Weimar Republic banking, and colonial markets. It triggered financial crises in Wall Street, widespread unemployment in Massachusetts, rural distress in Iowa, and political upheaval influencing figures such as Franklin D. Roosevelt, Herbert Hoover, Winston Churchill, and Éamon de Valera.
The crisis followed the speculative boom centered on Wall Street and the New York Stock Exchange, culminating in the Black Tuesday collapse that undermined confidence in J.P. Morgan & Co., Federal Reserve System, and regional banks such as Bank of America branches in San Francisco and Los Angeles. Internationally, the reparations regime from the Treaty of Versailles and interwar arrangements like the Dawes Plan and Young Plan linked Germany to credit from United States financiers including the Private Bank of J.P. Morgan. Commodity shocks affected exporters in Argentina, Australia, and South Africa while protectionist measures such as the Smoot–Hawley Tariff Act raised tariffs that disrupted trade with markets in Canada, Mexico, and Japan. Monetary contraction by the Bank of England and debt deflation influenced policy debates among economists in institutions like London School of Economics and Harvard University, shaping responses by policymakers including John Maynard Keynes and Milton Friedman.
Industrial hubs in Pittsburgh, Detroit, Manchester, and Essen saw factory closures as demand fell across United States, United Kingdom, France, and Germany. Agricultural regions from Kansas to Saskatchewan experienced price collapses affecting producers tied to markets in Buenos Aires and Shanghai. Banking crises in Vienna and Berlin precipitated runs on institutions like the Austrian National Bank and Deutsche Bank, while central banks including the Federal Reserve Bank of New York and the Banque de France struggled with gold flows linked to the Gold Standard system. International trade volumes contracted between trading partners such as United States–United Kingdom, Germany–Soviet Union, and Italy–Argentina, amplifying distress in export-dependent economies like Chile and Peru.
Mass unemployment reshaped urban life in New York City, Chicago, Liverpool, and Marseille, producing soup kitchens run by civic groups and charities linked to figures like Jane Addams and institutions such as the Salvation Army. Migrant crises sent families from Oklahoma to California and from Silesia to Warsaw, influencing literature associated with authors like John Steinbeck, Dorothy Parker, and Thomas Mann and films directed by Frank Capra, Fritz Lang, and Charles Chaplin. Cultural movements thrived in venues like the Harlem Renaissance and the Bloomsbury Group, while labor unrest produced strikes involving organizations such as the Industrial Workers of the World, Congress of Industrial Organizations, and Amalgamated Clothing Workers of America. Public health and education systems in capitals like Washington, D.C., Ottawa, and Canberra faced strain, and relief measures influenced religious leaders including Cardinal George Mundelein and Archbishop of Canterbury successors.
Responses varied: in the United States, Franklin D. Roosevelt enacted the New Deal, creating agencies such as the Civilian Conservation Corps, Agricultural Adjustment Act, Social Security Act, and the Securities and Exchange Commission. Opponents like Huey Long and supporters in Democratic Party debates shaped legislative outcomes in the United States Congress. In United Kingdom, the National Government under leaders such as Ramsay MacDonald and Stanley Baldwin pursued tariffs and public works. Germany saw political radicalization that aided the rise of Nazi Party leaders including Adolf Hitler and institutional changes at the Reichstag. Soviet Union planners in Gosplan implemented Five-Year Plans under Joseph Stalin, while Japan pursued militarization with policy-makers in Imperial Japanese Army and political figures like Hideki Tojo. International coordination through gatherings like the London Economic Conference failed to restore stable cooperation among delegations from France, Belgium, Netherlands, Sweden, and Norway.
Recovery paths diverged: rearmament in Nazi Germany and industrial mobilization in Soviet Union accelerated output, while United States recovery deepened after fiscal stimulus and reforms under Harry Hopkins and investment in public works like the Tennessee Valley Authority. Monetary abandonment of the Gold Standard by nations including United Kingdom and United States aided monetary expansion, and trade realignments with blocs such as the British Commonwealth supported exporters in Canada and Australia. International conflicts including the Second Sino-Japanese War and the rearmament preceding World War II increased demand for steel from Krupp plants in Essen and shipbuilding in Portsmouth and Newcastle upon Tyne, hastening full employment by the eve of the Battle of Britain period.
Long-term consequences included institutional reforms such as the creation of Federal Deposit Insurance Corporation and strengthened labor law through cases in the Supreme Court of the United States and legislation involving the National Labor Relations Board. Political realignments affected parties like the Democratic Party, Conservative Party (UK), and movements in France and Spain, contributing to later conflicts including the Spanish Civil War and influencing leaders like Francisco Franco. Economic thought evolved through contributions by John Maynard Keynes, Milton Friedman, and institutions like the International Monetary Fund and World Bank established after World War II to prevent recurrence. Memorialization appears in museums such as the Smithsonian Institution and literature preserved by archives in Library of Congress and British Library, underscoring lessons for policymakers in crises involving Federal Reserve System actions, trade policy exemplified by the Smoot–Hawley Tariff Act, and social protections like Social Security Act.
Category:20th century economic crises