Great Depression Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.Anti-spam check. Do not fill this in! ==Socio-economic effects== {{More citations needed section|date=May 2016}} [[File:Poor mother and children, Oklahoma, 1936 by Dorothea Lange.jpg|thumb|upright|An impoverished American family living in a shanty, 1936]] The majority of countries set up relief programs and most underwent some sort of political upheaval, pushing them to the right. Many of the countries in Europe and Latin America that were democracies saw them overthrown by some form of dictatorship or authoritarian rule, [[Nazi Germany#Nazi seizure of power|most famously in Germany]] in 1933. [[History of Newfoundland and Labrador#Political collapse|The Dominion of Newfoundland]] gave up democracy voluntarily. ===Australia=== {{Main|Great Depression in Australia}} Australia's dependence on agricultural and industrial exports meant it was one of the hardest-hit developed countries.<ref>Geoffrey Lawrence, ''Capitalism and the Countryside: The rural crisis in Australia'' (Pluto Press, 1987)</ref> Falling export demand and commodity prices placed massive downward pressures on wages. Unemployment reached a record high of 29% in 1932,<ref>[https://www.abs.gov.au/AUSSTATS/abs@.nsf/Previousproducts/1301.0Feature%20Article142001?opendocument&tabname=Summary&prodno=1301.0&issue=2001&num=&view= A Century of Change in the Australian Labour Market] {{Webarchive|url=https://web.archive.org/web/20211231105618/https://www.abs.gov.au/AUSSTATS/abs@.nsf/Previousproducts/1301.0Feature%20Article142001?opendocument&tabname=Summary&prodno=1301.0&issue=2001&num=&view= |date=December 31, 2021 }}, Australian Bureau of Statistics</ref> with incidents of [[civil unrest]] becoming common.<ref>John Birmingham (2000). Leviathan: The unauthorised biography of Sydney. Random House. {{ISBN|978-0-09-184203-1}}</ref> After 1932, an increase in wool and meat prices led to a gradual recovery.<ref>Judy Mackinolty, ed. ''The Wasted Years?: Australia's Great Depression'' (Allen & Unwin, 1981).</ref> ===Canada=== {{Main|Great Depression in Canada}} [[File:UnemployedMarch.jpg|thumb|upright|Unemployed men march in [[Toronto]], [[Ontario]], Canada.]] Harshly affected by both the global economic downturn and the [[Dust Bowl]], Canadian industrial production had by 1932 fallen to only 58% of its 1929 figure, the second-lowest level in the world after the United States, and well behind countries such as Britain, which fell to only 83% of the 1929 level. Total [[Measures of national income and output|national income]] fell to 56% of the 1929 level, again worse than any country apart from the United States. Unemployment reached 27% at the depth of the Depression in 1933.<ref>[https://www.canadianeconomy.gc.ca/English/economy/1929_39depression.html 1929–1939 – The Great Depression] {{webarchive|url=https://web.archive.org/web/20090127051620/https://canadianeconomy.gc.ca/english/economy/1929_39depression.html |date=January 27, 2009 }}, Source: Bank of Canada</ref> ===Chile=== {{Main|Great Depression in Chile}} The [[League of Nations]] labeled [[Chile]] the country hardest hit by the Great Depression because 80% of government revenue came from exports of copper and nitrates, which were in low demand. Chile initially felt the impact of the Great Depression in 1930, when GDP dropped 14%, mining income declined 27%, and export earnings fell 28%. By 1932, GDP had shrunk to less than half of what it had been in 1929, exacting a terrible toll in unemployment and business failures. Influenced profoundly by the Great Depression, many government leaders promoted the development of local industry in an effort to insulate the economy from future external shocks. After six years of government [[Austerity|austerity measures]], which succeeded in reestablishing Chile's creditworthiness, Chileans elected to office during the 1938–58 period a succession of center and left-of-center governments interested in promoting economic growth through government intervention. Prompted in part by the devastating [[1939 Chillán earthquake]], the [[Popular Front (Chile)|Popular Front]] government of [[Pedro Aguirre Cerda]] created the Production Development Corporation (Corporación de Fomento de la Producción, [[CORFO]]) to encourage with subsidies and direct investments an ambitious program of [[import substitution industrialization]]. Consequently, as in other Latin American countries, [[protectionism]] became an entrenched aspect of the Chilean economy. ===China=== {{Main|Nanjing Decade}} China was largely unaffected by the Depression, mainly by having stuck to the [[Silver standard]]. However, the U.S. silver purchase act of 1934 created an intolerable demand on China's silver coins, and so, in the end, the silver standard was officially abandoned in 1935 in favor of the four Chinese national banks'{{Which|date=September 2020}} "legal note" issues. China and the [[British colony of Hong Kong]], which followed suit in this regard in September 1935, would be the last to abandon the silver standard. In addition, the [[Nationalist Government]] also acted energetically to modernize the legal and penal systems, stabilize prices, amortize debts, reform the banking and currency systems, build railroads and highways, improve public health facilities, legislate against traffic in narcotics and augment industrial and agricultural production. On 3 November 1935, the government instituted the fiat currency (fapi) reform, immediately stabilizing prices and also raising revenues for the government. ===European African colonies=== The sharp fall in commodity prices, and the steep decline in exports, hurt the economies of the European colonies in Africa and Asia.<ref>Anthony Latham and John Heaton, ''The Depression and the Developing World, 1914–1939'' (1981).</ref><ref>{{cite journal|jstor=3601244|language=fr|title=Mutation de l'Impérialisme Colonial Français dans les Années 30|journal=African Economic History|issue=4|pages=103–152|last1=Coquery-Vidrovitch|first1=C.|year=1977|doi=10.2307/3601244}}</ref> The agricultural sector was especially hard hit. For example, [[sisal]] had recently become a major export crop in Kenya and Tanganyika. During the depression, it suffered severely from low prices and marketing problems that affected all colonial commodities in Africa. Sisal producers established centralized controls for the export of their fibre.<ref>{{cite journal | last1 = Westcott | first1 = Nicholas | year = 1984 | title = The East African sisal industry, 1929–1949: the marketing of a colonial commodity during depression and war | journal = Journal of African History | volume = 25 | issue = 4| pages = 445–461 | doi = 10.1017/s0021853700028486 | s2cid = 161203218 }}</ref> There was widespread unemployment and hardship among peasants, labourers, colonial auxiliaries, and artisans.<ref>R. Olufeni Ekundare, ''An Economic History of Nigeria 1860–1960'' (1973) [https://www.sahistory.org.za/archive/economic-history-nigeria-1860-1960-r-olufeni-ekundare online] {{Webarchive|url=https://web.archive.org/web/20211231120210/https://www.sahistory.org.za/archive/economic-history-nigeria-1860-1960-r-olufeni-ekundare |date=December 31, 2021 }} pp. 104–226.</ref> The budgets of colonial governments were cut, which forced the reduction in ongoing infrastructure projects, such as the building and upgrading of roads, ports and communications.<ref>{{cite journal | last1 = Olubomehin | first1 = O.O. | year = 2002 | title = Road Transportation and the Economy of South-Western Nigeria, 1920–1939 | journal = Lagos Historical Review | volume = 2 | pages = 106–121 }}</ref> The budget cuts delayed the schedule for creating systems of higher education.<ref>{{cite journal | last1 = Lungu | first1 = Gatian F. | year = 1993 | title = Educational Policy-Making in Colonial Zambia: The Case of Higher Education for Africans from 1924 to 1964 | journal = The Journal of Negro History | volume = 78 | issue = 4| pages = 207–232 | doi = 10.2307/2717416 | jstor = 2717416 | s2cid = 149538992 }}</ref> The depression severely hurt the export-based [[Belgian Congo]] economy because of the drop in international demand for raw materials and for agricultural products. For example, the price of peanuts fell from 125 to 25 centimes. In some areas, as in the [[Katanga Province|Katanga]] mining region, employment declined by 70%. In the country as a whole, the wage labour force decreased by 72,000 and many men returned to their villages. In Leopoldville, the population decreased by 33%, because of this labour migration.<ref>R. Anstey, ''King Leopold's Legacy: The Congo under Belgian Rule 1908–1960'' (1966), p. 109.</ref> Political protests were not common. However, there was a growing demand that the paternalistic claims be honored by colonial governments to respond vigorously. The theme was that economic reforms were more urgently needed than political reforms.<ref>{{cite journal | last1 = Ochonu | first1 = Moses | year = 2009 | title = Critical convergence: the Great Depression and the meshing of Nigerian and British anti-colonial polemic | journal = Canadian Journal of African Studies | volume = 43 | issue = 2| pages = 245–281 | doi = 10.1080/00083968.2010.9707572 | s2cid = 142695035 }}</ref> French West Africa launched an extensive program of educational reform in which "rural schools" designed to modernize agriculture would stem the flow of under-employed farm workers to cities where unemployment was high. Students were trained in traditional arts, crafts, and farming techniques and were then expected to return to their own villages and towns.<ref>{{cite journal | last1 = Gamble | first1 = Harry | year = 2009 | title = Les paysans de l'empire: écoles rurales et imaginaire colonial en Afrique occidentale française dans les années 1930 | journal = Cahiers d'Études Africaines | volume = 49 | issue = 3| pages = 775–803 | doi = 10.4000/etudesafricaines.15630 | doi-access = free }}</ref> ===France=== {{Main|Great Depression in France}} [[File:Agence Mondial 1932 - Soupe populaire offerte aux chômeurs en 1932 2.jpg|thumb|Soup kitchen for the unemployed in Paris, 1932]] The crisis affected France a bit later than other countries, hitting hard around 1931.<ref>{{Cite journal |jstor = 2601740|title = France and the Depression|journal = International Affairs |volume = 15|issue = 2|pages = 202–224|last1 = Laufenburger|first1 = Henry|year = 1936|doi = 10.2307/2601740}}</ref> While the 1920s grew at the very strong rate of 4.43% per year, the 1930s rate fell to only 0.63%.<ref>Jean-Pierre Dormois, ''The French Economy in the Twentieth Century'' (2004) p. 31</ref> The depression was relatively mild: unemployment peaked under 5%, the fall in production was at most 20% below the 1929 output; there was no banking crisis.<ref>{{cite journal|doi=10.1006/redy.2001.0143|title=The French Depression in the 1930s|journal=Review of Economic Dynamics|volume=5|pages=73–99|year=2002|last1=Beaudry|first1=Paul|last2=Portier|first2=Franck}}</ref> However, the depression had drastic effects on the local economy, and partly explains the [[February 6, 1934 riots]] and even more the formation of the [[Popular Front (France)|Popular Front]], led by [[Section française de l'Internationale ouvrière|SFIO socialist leader]] [[Léon Blum]], which won the elections in 1936. Ultra-nationalist groups also saw increased popularity, although democracy prevailed into [[World War II]]. France's relatively high degree of self-sufficiency meant the damage was considerably less than in neighbouring states like Germany. ===Germany=== {{Main|Weimar Republic}} [[File:Bundesarchiv Bild 102-11008, Hamburg, Arbeitslose Hafenarbeiter im Hafenviertel.jpg|thumb|Unemployed men in Hamburg, 1931]] The Great Depression hit Germany hard. The impact of the [[Wall Street Crash]] forced American banks to end the new loans that had been funding the repayments under the [[Dawes Plan]] and the [[Young Plan]]. The financial crisis escalated out of control in mid-1931, starting with the collapse of the [[Credit Anstalt]] in Vienna in May.<ref name="William Ashworth 1962 pp. 237-244"/> This put heavy pressure on Germany, which was already in political turmoil with the rise in violence of [[Nazism|national socialist]] and [[Communism|communist]] movements, as well as with investor nervousness at harsh government financial policies,<ref name="Isabel Schnabel 1931"/> investors withdrew their short-term money from Germany as confidence spiraled downward. The Reichsbank lost 150 million marks in the first week of June, 540 million in the second, and 150 million in two days, June 19–20. Collapse was at hand. U.S. President Herbert Hoover called for a moratorium on payment of war reparations. This angered Paris, which depended on a steady flow of German payments, but it slowed the crisis down, and the moratorium was agreed to in July 1931. An international conference in London later in July produced no agreements but on August 19 a standstill agreement froze Germany's foreign liabilities for six months. Germany received emergency funding from private banks in New York as well as the Bank of International Settlements and the Bank of England. The funding only slowed the process. Industrial failures began in Germany, a major bank closed in July and a two-day holiday for all German banks was declared. Business failures became more frequent in July, and spread to Romania and Hungary.<ref name="V. Hodson, 1938 pp. 64-76"/> In 1932, 90% of German reparation payments were cancelled (in the 1950s, Germany repaid all its missed reparations debts). Widespread unemployment reached 25% as every sector was hurt. The government did not increase government spending to deal with Germany's growing crisis, as they were afraid that a high-spending policy could lead to a return of the [[hyperinflation]] that had affected Germany in 1923. Germany's [[Weimar Republic]] was hit hard by the depression, as American loans to help rebuild the German economy now stopped.<ref>[https://www.english.uiuc.edu/maps/depression/about.htm About the Great Depression] {{Webarchive|url=https://web.archive.org/web/20081220090243/http://www.english.uiuc.edu/maps/depression/about.htm |date=December 20, 2008 }}, University of Illinois</ref> The unemployment rate reached nearly 30% in 1932.<ref name="pbs"/> [[File:The Great Depression German Medal 1932, the Devil operating a Screw Press against a Workman, obverse.jpg|thumb|left|The [[devil]] operating a screw press against a workman, Nazi propaganda [[medal]], obverse]] [[File:The Great Depression German Medal 1932, the Devil operating a Screw Press against a Workman, reverse.jpg|thumb|The reverse of this medal supporting the German election Nazi campaigns of 1932]] The German political landscape was dramatically altered, leading to [[Adolf Hitler's rise to power]]. The [[Nazi Party]] rose from being peripheral to winning 18.3% of the vote in the [[1930 German federal election|September 1930 election]] and the [[Communist Party of Germany|Communist Party]] also made gains, while moderate forces like the [[Social Democratic Party of Germany|Social Democratic Party]], the [[German Democratic Party|Democratic Party]] and the [[German People's Party|People's Party]] lost seats. The next two years were marked by increased street violence between Nazis and Communists, while governments under President [[Paul von Hindenburg]] increasingly relied on [[rule by decree]], bypassing the [[Reichstag (Weimar Republic)|Reichstag]].<ref>{{cite book | last = Bullock | first = Alan | author-link = Alan Bullock | title = Hitler: A Study in Tyranny | year = 1991 | orig-year = 1962 | publisher = Harper Perennial | location = New York; London | isbn = 978-1-56852-036-0 | title-link = Hitler: A Study in Tyranny | page=}}</ref> Hitler ran for the Presidency in 1932, and while he lost to the incumbent Hindenburg in the election, it marked a point during which both Nazi Party and the Communist parties rose in the years following the crash to altogether possess a Reichstag majority following the [[July 1932 German federal election|general election in July 1932]].<ref name="pbs">[https://www.pbs.org/wgbh/commandingheights/lo/countries/de/de_economic.html Germany – Economic] {{Webarchive|url=https://web.archive.org/web/20211231133720/https://www.pbs.org/wgbh/commandingheights/lo/countries/de/de_economic.html |date=December 31, 2021 }}, Public Broadcasting Service (PBS).</ref><ref>{{Cite web|url=https://www.historyplace.com/worldwar2/riseofhitler/runs.htm|title=The History Place – Rise of Hitler: Hitler Runs for President|website=www.historyplace.com|access-date=October 23, 2016|archive-date=November 3, 2016|archive-url=https://web.archive.org/web/20161103215044/http://www.historyplace.com/worldwar2/riseofhitler/runs.htm|url-status=live}}</ref> Although the Nazis lost seats in [[November 1932 German federal election|November 1932 election]], they remained the largest party, and Hitler was appointed as Chancellor the following January. The government formation deal was designed to give Hitler's conservative coalition partners many checks on his power, but over the next few months, the Nazis manoeuvred to consolidate a single-party dictatorship.<ref name="Kershaw98">{{cite book |author= Ian Kershaw |title= Hitler, 1889–1936: Hubris |url= https://books.google.com/books?id=nV-N10gyoFwC |year=1998 |publisher=W.W. Norton |isbn= 978-0-393-32035-0 |page=411}}</ref> [[File:Bundesarchiv Bild 119-11-19-12, Adolf Hitler bei Ortsgruppenfeier der NSDAP Rosenheim.jpg|thumb|[[Adolf Hitler]] speaking in 1935]] Hitler followed an [[autarky]] economic policy, creating a network of client states and economic allies in central Europe and Latin America. By cutting wages and taking control of labor unions, plus public works spending, unemployment fell significantly by 1935. Large-scale military spending played a major role in the recovery.<ref>[[Adam Tooze]], ''The Wages of Destruction: The Making and Breaking of the Nazi Economy'' (2007)</ref> The policies had the effect of driving up the cost of food imports and depleting foreign currency reserves, leading to economic impasse by 1936. Nazi Germany faced a choice of either reversing course or pressing ahead with rearmament and autarky. Hitler chose the latter route, which according to [[Ian Kershaw]] "could only be partially accomplished without territorial expansion" and therefore war.<ref>[[Richard Overy|R. J. Overy]], "Misjudging Hitler" pp. 93–115 from ''The Origins of the Second World War Reconsidered'' edited by Gordon Martel, Routledge: London, 1999 pp. 98–99.</ref><ref>Kershaw, Ian ''To Hell and Back: Europe 1914–1949'', Ch. 5</ref> ===Greece=== {{Main|Economic history of Greece and the Greek world}} The reverberations of the Great Depression hit Greece in 1932. The [[Bank of Greece]] tried to adopt deflationary policies to stave off the crises that were going on in other countries, but these largely failed. For a brief period, the drachma was pegged to the U.S. dollar, but this was unsustainable given the country's large trade deficit and the only long-term effects of this were Greece's foreign exchange reserves being almost totally wiped out in 1932. Remittances from abroad declined sharply and the value of the drachma began to plummet from 77 drachmas to the dollar in March 1931 to 111 drachmas to the dollar in April 1931. This was especially harmful to Greece as the country relied on imports from the UK, France, and the Middle East for many necessities. Greece went off the gold standard in April 1932 and declared a moratorium on all interest payments. The country also adopted protectionist policies such as import quotas, which several European countries did during the period. Protectionist policies coupled with a weak drachma, stifling imports, allowed the Greek industry to expand during the Great Depression. In 1939, the Greek industrial output was 179% that of 1928. These industries were for the most part "built on sand" as one report of the Bank of Greece put it, as without massive protection they would not have been able to survive. Despite the global depression, Greece managed to suffer comparatively little, averaging an average growth rate of 3.5% from 1932 to 1939. The dictatorial regime of [[Ioannis Metaxas]] took over the Greek government in 1936, and economic growth was strong in the years leading up to the Second World War. ===Iceland=== {{Main|Economic history of Iceland}} Icelandic post-World War I prosperity came to an end with the outbreak of the Great Depression. The Depression hit Iceland hard as the value of exports plummeted. The total value of Icelandic exports fell from 74 million kronur in 1929 to 48 million in 1932, and was not to rise again to the pre-1930 level until after 1939.<ref name=":3">{{Cite book|title=History of Iceland|last=Karlsson|first=Gunnar|year=2000|pages=308–12}}</ref> Government interference in the economy increased: "Imports were regulated, trade with foreign currency was monopolized by state-owned banks, and loan capital was largely distributed by state-regulated funds".<ref name=":3" /> Due to the outbreak of the [[Spanish Civil War]], which cut Iceland's exports of saltfish by half, the Depression lasted in Iceland until the outbreak of World War II (when prices for fish exports soared).<ref name=":3" /> ===India=== {{Main|Great Depression in India}} How much India was affected has been hotly debated. Historians have argued that the Great Depression slowed long-term industrial development.<ref>{{cite book|title=A Colonial Economy in the Great Depression, Madras (1929–1937)|first=K. A. |last=Manikumar|year=2003|ref=Manikumar}}</ref> Apart from two sectors—jute and coal—the economy was little affected. However, there were major negative impacts on the jute industry, as world demand fell and prices plunged.<ref>Samita Sen, "Labour, Organization and Gender: The Jute Industry in India in the 1930s", in Helmut Konrad and Wolfgang Maderthaner, eds. ''Routes Into the Abyss: Coping with Crises in the 1930s'' (2013) pp. 152–66.</ref> Otherwise, conditions were fairly stable. Local markets in agriculture and small-scale industry showed modest gains.<ref>{{Cite journal |jstor = 312643|title = The Great Depression and Indian Industry: Changing Interpretations and Changing Perceptions|journal = Modern Asian Studies|volume = 21|issue = 3|pages = 585–623|last1 = Simmons|first1 = Colin|year = 1987|doi = 10.1017/S0026749X00009215|s2cid = 145538790}}</ref> ===Ireland=== {{Main|Economic history of the Republic of Ireland}} Frank Barry and [[Mary E. Daly]] have argued that: :Ireland was a largely agrarian economy, trading almost exclusively with the UK, at the time of the Great Depression. Beef and dairy products comprised the bulk of exports, and Ireland fared well relative to many other commodity producers, particularly in the early years of the depression.<ref>Frank Barry and Mary F. Daly, "Concurrent Irish Perspectives on the Great Depression" (2010) [ online ]</ref><ref>Frank Barry and Mary E. Daly, "Irish Perceptions of the Great Depression" in Michael Psalidopoulos, ''The Great Depression in Europe: Economic Thought and Policy in a National Context'' (Athens: Alpha Bank, 2012) pp. 395–424.</ref><ref>See also B. Girvin, ''Between Two Worlds: Politics and Economy in Independent Ireland'' (Dublin: Gill and Macmillan, 1989).</ref><ref>Barry, Frank, and Mary E. Daly. "Irish Perceptions of the Great Depression" (No. iiisdp349. IIIS, 2011.) [https://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp349.pdf Online] {{Webarchive|url=https://web.archive.org/web/20150811154311/https://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp349.pdf |date=August 11, 2015 }}</ref> ===Italy=== {{Main|Economic history of Italy}} [[File:Bundesarchiv Bild 102-12509, Italien, Arbeitslose vor Fabrik.jpg|thumb|Unemployed outside a factory in Italy, October 1931]] [[File:Mussolini visiting Fiat, 1932.jpg|thumb|[[Benito Mussolini]] giving a speech at the [[Fiat]] [[Lingotto]] factory in Turin, 1932]] The Great Depression hit [[Economy of Italy under fascism#The Great Depression|Italy]] very hard.<ref>Vera Zamagni, ''The economic history of Italy 1860–1990'' (Oxford University Press, 1993)</ref> As industries came close to failure they were bought out by the banks in a largely illusionary bail-out—the assets used to fund the purchases were largely worthless. This led to a financial crisis peaking in 1932 and major government intervention. The [[Industrial Reconstruction Institute]] (IRI) was formed in January 1933 and took control of the bank-owned companies, suddenly giving Italy the largest state-owned industrial sector in Europe (excluding the USSR). IRI did rather well with its new responsibilities—restructuring, modernising and rationalising as much as it could. It was a significant factor in post-1945 development. But it took the Italian economy until 1935 to recover the manufacturing levels of 1930—a position that was only 60% better than that of 1913.<ref>Fabrizio Mattesini, and Beniamino Quintieri. "Italy and the Great Depression: An analysis of the Italian economy, 1929–1936." ''Explorations in Economic History'' (1997) 34#3 pp: 265–294.</ref><ref>Fabrizio Mattesini and Beniamino Quintieri. "Does a reduction in the length of the working week reduce unemployment? Some evidence from the Italian economy during the Great Depression." ''Explorations in Economic History'' (2006), 43#3, pp. 413–37.</ref> ===Japan=== The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929–31. Japan's Finance Minister [[Takahashi Korekiyo]] was the first to implement what have come to be identified as [[Keynesian economics|Keynesian]] economic policies: first, by large fiscal stimulus involving [[deficit spending]]; and second, by devaluing [[Yen|the currency]]. Takahashi used the Bank of Japan to sterilize the deficit spending and minimize resulting inflationary pressures. Econometric studies have identified the fiscal stimulus as especially effective.<ref>Myung Soo Cha, "Did Takahashi Korekiyo Rescue Japan from the Great Depression?", ''The Journal of Economic History'' 63, No. 1 (March 2003): 127–144.</ref> The devaluation of the currency had an immediate effect. Japanese textiles began to displace British textiles in export markets. The deficit spending proved to be most profound and went into the purchase of munitions for the armed forces. By 1933, Japan was already out of the depression. By 1934, Takahashi realized that the economy was in danger of overheating, and to avoid inflation, moved to reduce the deficit spending that went towards armaments and munitions. This resulted in a strong and swift negative reaction from nationalists, especially those in the army, culminating in his assassination in the course of the [[February 26 Incident]]. This had a [[chilling effect (term)|chilling effect]] on all civilian bureaucrats in the Japanese government. From 1934, the military's dominance of the government continued to grow. Instead of reducing deficit spending, the government introduced price controls and rationing schemes that reduced, but did not eliminate inflation, which remained a problem until the end of World War II. The deficit spending had a transformative effect on Japan. Japan's industrial production doubled during the 1930s. Further, in 1929 the list of the largest firms in Japan was dominated by light industries, especially textile companies (many of Japan's automakers, such as [[Toyota]], have their roots in the textile industry). By 1940 [[light industry]] had been displaced by heavy industry as the largest firms inside the Japanese economy.<ref>(For more on the Japanese economy in the 1930s see "MITI and the Japanese Miracle" by [[Chalmers Johnson]].)</ref> ===Latin America=== {{Main|Great Depression in Latin America}} Because of high levels of U.S. investment in Latin American economies, they were severely damaged by the Depression. Within the region, [[Chile]], [[Bolivia]] and [[Peru]] were particularly badly affected.<ref>Rosemary Thorp, ''Latin America in the 1930s: the role of the periphery in world crisis'' (Palgrave Macmillan, 2000).</ref> Before the 1929 crisis, links between the world economy and [[Latin America]]n economies had been established through American and British investment in Latin American exports to the world. As a result, Latin Americans export industries felt the depression quickly. World prices for commodities such as wheat, coffee and copper plunged. Exports from all of Latin America to the U.S. fell in value from $1.2 billion in 1929 to $335 million in 1933, rising to $660 million in 1940. But on the other hand, the depression led the area governments to develop new local industries and expand consumption and production. Following the example of the New Deal, governments in the area approved regulations and created or improved welfare institutions that helped millions of new industrial workers to achieve a better standard of living. === Middle East and North Africa === The Great Depression had severe impacts across the Middle East and North Africa, including economic decline which led to social unrest.<ref>{{Cite book|last=Anderson|first=Betty S.|url=https://www.worldcat.org/oclc/945376555|title=A history of the modern Middle East : rulers, rebels, and rogues|date=2016|isbn=978-0-8047-9875-4|location=Stanford, California|oclc=945376555|access-date=February 13, 2022|archive-date=February 18, 2022|archive-url=https://web.archive.org/web/20220218125354/https://www.worldcat.org/title/history-of-the-modern-middle-east-rulers-rebels-and-rogues/oclc/945376555|url-status=live}}</ref> ===Netherlands=== {{Main|Great Depression in the Netherlands}} [[File:Werklozen in de rij - Row of unemployed (5371990267).jpg|thumb|A line of unemployed people in Amsterdam, 1933]] From roughly 1931 to 1937, the [[Netherlands]] suffered a deep and exceptionally long depression. This depression was partly caused by the after-effects of the American stock-market crash of 1929, and partly by internal factors in the Netherlands. Government policy, especially the very late dropping of the Gold Standard, played a role in prolonging the depression. The Great Depression in the Netherlands led to some political instability and riots, and can be linked to the rise of the Dutch fascist political party [[Nationaal Socialistische Beweging|NSB]]. The depression in the Netherlands eased off somewhat at the end of 1936, when the government finally dropped the Gold Standard, but real economic stability did not return until after World War II.<ref>E. H. Kossmann, ''The Low Countries: 1780–1940'' (1978).</ref> ===New Zealand=== {{Main|History of New Zealand#Great Depression}} [[Dominion of New Zealand|New Zealand]] was especially vulnerable to worldwide depression, as it relied almost entirely on agricultural exports to the United Kingdom for its economy. The drop in exports led to a lack of disposable income from the farmers, who were the mainstay of the local economy. Jobs disappeared and wages plummeted, leaving people desperate and charities unable to cope. Work relief schemes were the only government support available to the unemployed, the rate of which by the early 1930s was officially around 15%, but unofficially nearly twice that level (official figures excluded Māori and women). In 1932, riots occurred among the unemployed in three of the country's main cities ([[Auckland]], [[Dunedin]], and [[Wellington]]). Many were arrested or injured through the tough official handling of these riots by police and volunteer "special constables".<ref>"[https://www.tepapa.govt.nz/whatson/exhibitions/sliceofheaven/exhibition/SocialWelfare/Pages/Greatdepression.aspx Social Welfare and The State: Great Depression] {{Webarchive|url=https://web.archive.org/web/20160307070443/http://tepapa.govt.nz/whatson/exhibitions/sliceofheaven/exhibition/socialwelfare/pages/greatdepression.aspx |date=March 7, 2016 }}", [[Museum of New Zealand Te Papa Tongarewa]].</ref> === Poland === {{Main|Second Polish Republic#Economy}} Poland was affected by the Great Depression longer and stronger than other countries due to inadequate economic response of the government and the pre-existing economic circumstances of the country. At that time, Poland was under the authoritarian rule of [[Sanation|Sanacja]], whose leader, [[Józef Piłsudski]], was opposed to leaving the [[gold standard]] until his death in 1935. As a result, Poland was unable to perform a more active monetary and budget policy. Additionally, Poland was a relatively young country that emerged merely 10 years earlier after being partitioned between [[German Empire|German]], [[Russian Empire|Russian]] and the [[Austria-Hungary|Austro-Hungarian Empires]] for over a century. Prior to independence, the Russian part exported 91% of its exports to Russia proper, while the German part exported 68% to Germany proper. After independence, these markets were largely lost, as Russia transformed into [[Soviet Union|USSR]] that was mostly a closed economy, and Germany was in a tariff war with Poland throughout the 1920s.<ref>{{Cite web|date=November 3, 2018|title=II RP była gospodarczą porażką. Mity na jej temat są bardzo szkodliwe [TOP 2018]|url=https://forsal.pl/artykuly/1330494,ii-rp-byla-gospodarcza-porazka-mity-na-jej-temat-sa-bardzo-szkodliwe.html|access-date=July 29, 2021|website=forsal.pl|language=pl|archive-date=October 19, 2021|archive-url=https://web.archive.org/web/20211019024334/https://forsal.pl/artykuly/1330494,ii-rp-byla-gospodarcza-porazka-mity-na-jej-temat-sa-bardzo-szkodliwe.html|url-status=live}}</ref> [[Industrial production]] fell significantly: in 1932 [[Anthracite|hard coal]] production was down 27% compared to 1928, [[steel]] production was down 61%, and [[iron ore]] production noted an 89% decrease.<ref name=":2">{{Cite web|title=Wielki kryzys gospodarczy w Polsce|url=https://histmag.org/Wielki-kryzys-gospodarczy-w-Polsce-9980|access-date=July 29, 2021|website=histmag.org|archive-date=July 29, 2021|archive-url=https://web.archive.org/web/20210729011419/https://histmag.org/Wielki-kryzys-gospodarczy-w-Polsce-9980|url-status=live}}</ref> On the other hand, electrotechnical, leather, and paper industries noted marginal increases in production output. Overall, industrial production decreased by 41%.<ref>{{Cite web|date=November 9, 2020|title=Wielki kryzys w Polsce. Zbankrutowało niemal 25% firm, a produkt krajowy spadł o ponad połowę|url=https://wielkahistoria.pl/wielki-kryzys-w-polsce-zbankrutowalo-niemal-25-firm-a-produkt-krajowy-spadl-o-ponad-polowe/|access-date=July 29, 2021|website=WielkaHistoria|language=pl-PL|archive-date=July 29, 2021|archive-url=https://web.archive.org/web/20210729012308/https://wielkahistoria.pl/wielki-kryzys-w-polsce-zbankrutowalo-niemal-25-firm-a-produkt-krajowy-spadl-o-ponad-polowe/|url-status=live}}</ref> A distinct feature of the Great Depression in Poland was the de-concentration of industry, as larger conglomerates were less flexible and paid their workers more than smaller ones. [[Unemployment|Unemployment rate]] rose significantly (up to 43%) while nominal [[wage]]s fell by 51% in 1933 and 56% in 1934, relative to 1928. However, real wages fell less due to the government's policy of decreasing cost of living, particularly food expenditures (food prices were down by 65% in 1935 compared to 1928 price levels). Material conditions deprivation led to strikes, some of them violent or violently pacified – like in [[Sanok]] ({{Interlanguage link|Marsz Głodnych w Sanoku|lt=March of the Hungry in Sanok|pl|Marsz Głodnych w Sanoku}} March 6, 1930), [[Lesko County|Lesko county]] ([[Lesko uprising]] 21 June – 9 July 1932) and [[Zawiercie]] ({{Interlanguage link|Krwawy piątek (1930)|lt=Bloody Friday (1930)|pl|Bloody Friday (1930)}} 18 April 1930). To adapt to the crisis, Polish government employed deflation methods such as high [[interest rate]]s, credit limits and budget [[austerity]] to keep a [[Fixed exchange rate system|fixed exchange rate]] with currencies tied to the gold standard. Only in late 1932 did the government effect a plan to fight the economic crisis.<ref>{{Cite web|title=140 lat temu urodził się Bolesław Wieniawa-Długoszowski|url=https://dzieje.pl/wiadomosci/140-lat-temu-urodzil-sie-boleslaw-wieniawa-dlugoszowski|access-date=July 29, 2021|website=dzieje.pl|language=pl|archive-date=August 12, 2021|archive-url=https://web.archive.org/web/20210812060931/https://dzieje.pl/wiadomosci/140-lat-temu-urodzil-sie-boleslaw-wieniawa-dlugoszowski|url-status=live}}</ref> Part of the plan was mass [[public works]] scheme, employing up to 100,000 people in 1935.<ref name=":2" /> After Piłsudski's death, in 1936 the gold standard regime was relaxed, and launching the development of the [[Central Industrial Region (Poland)|Central Industrial Region]] kicked off the economy, to over 10% annual growth rate in the 1936–1938 period. ===Portugal=== {{Main|Economic history of Portugal}} Already under the rule of a dictatorial junta, the [[Ditadura Nacional]], Portugal suffered no turbulent political effects of the Depression, although [[António de Oliveira Salazar]], already appointed Minister of Finance in 1928 greatly expanded his powers and in 1932 rose to [[Prime Minister of Portugal]] to found the [[Estado Novo (Portugal)|Estado Novo]], an [[authoritarian]] [[corporatist]] dictatorship. With the budget balanced in 1929, the effects of the depression were relaxed through harsh measures towards [[budget balance]] and [[autarky]], causing social discontent but stability and, eventually, an impressive economic growth.<ref>José Cardozo, "The great depression and Portugal" in Michael Psalidopoulos, ed. (2012). ''The Great Depression in Europe: Economic Thought and Policy in a National Context'' Athens: Alpha Bank, {{ISBN|978-960-99793-6-8}}. pp. 361–94 [https://www.ics.ul.pt/rdonweb-docs/ICS_JLCardoso_Great_AI.pdf Online] {{Webarchive|url=https://web.archive.org/web/20170313092132/http://www.ics.ul.pt/rdonweb-docs/ICS_JLCardoso_Great_AI.pdf |date=March 13, 2017 }}</ref> ===Puerto Rico=== In the years immediately preceding the depression, negative developments in the island and world economies perpetuated an unsustainable cycle of subsistence for many Puerto Rican workers. The 1920s brought a dramatic drop in Puerto Rico's two primary exports, raw sugar and coffee, due to a devastating hurricane in 1928 and the plummeting demand from global markets in the latter half of the decade. 1930 unemployment on the island was roughly 36% and by 1933 Puerto Rico's per capita income dropped 30% (by comparison, unemployment in the United States in 1930 was approximately 8% reaching a height of 25% in 1933).<ref>{{Cite book|title=A New Deal for the Tropics|last=Rodriguez|first=Manuel|publisher=Markus Wiener|year=2011|location=Princeton|page=23}}</ref><ref>{{Cite web|url=https://herb.ashp.cuny.edu/items/show/1510|title=Graph of U.S. Unemployment Rate: 1930–1945|website=American Social History Project|access-date=April 19, 2017|archive-date=January 23, 2021|archive-url=https://web.archive.org/web/20210123225658/https://herb.ashp.cuny.edu/items/show/1510|url-status=live}}</ref> To provide relief and economic reform, the United States government and Puerto Rican politicians such as [[Carlos E. Chardón|Carlos Chardon]] and [[Luis Muñoz Marín]] created and administered first the Puerto Rico Emergency Relief Administration (PRERA) 1933 and then in 1935, the [[Puerto Rico Reconstruction Administration]] (PRRA).<ref>{{Cite book|title=Economic History of Puerto Rico|last=Dietz|first=James|publisher=Princeton University Press|year=1986|isbn=0-691-02248-8|location=Princeton|pages=154–55|url=https://books.google.com/books?id=MeI9DwAAQBAJ|access-date=February 4, 2018|archive-date=August 18, 2021|archive-url=https://web.archive.org/web/20210818032634/https://books.google.com/books?id=MeI9DwAAQBAJ|url-status=live}}</ref> ===Romania=== {{Main|Great Depression in Romania}} Romania was also affected by the Great Depression.<ref>{{cite journal|url=https://nbs.rs/export/sites/NBS_site/documents/publikacije/konferencije/seemhn_conf/SEEMHN_14_Rumunija.pdf|title=The National Bank of Romania during the Great Depression – 1929–1933|first1=Elisabeta|last1=Blejan|first2=Brîndușa|last2=Costache|first3=Adriana|last3=Aloman|publisher=[[National Bank of Serbia]]|journal=Fourth Conference of Southeast Europe Monetary History Network (SEEMHN)|issue=8|pages=1–34|year=2009|access-date=March 21, 2021|archive-date=November 19, 2021|archive-url=https://web.archive.org/web/20211119000002/https://www.nbs.rs/export/sites/NBS_site/documents/publikacije/konferencije/seemhn_conf/SEEMHN_14_Rumunija.pdf|url-status=live}}</ref><ref>{{cite journal|url=https://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2019-43.pdf|title=Romania's unsustainable stabilization: 1929–1933|first1=Raphaël|last1=Chiappini|first2=Dominique|last2=Torre|first3=Elise|last3=Tosi|journal=GREDEG Working Papers|publisher=Groupe de Recherche en Droit, Economie, Gestion|issue=2019–43|pages=1–32|year=2009|access-date=February 18, 2022|archive-date=July 8, 2021|archive-url=https://web.archive.org/web/20210708140527/http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2019-43.pdf|url-status=live}}</ref> ===South Africa=== {{Main|Great Depression in South Africa}} As world trade slumped, demand for South African agricultural and mineral exports fell drastically. The [[Carnegie Commission of Investigation on the Poor White Question in South Africa|Carnegie Commission on Poor Whites]] had concluded in 1931 that nearly one-third of [[Afrikaner]]s lived as paupers. The social discomfort caused by the depression was a contributing factor in the 1933 split between the "gesuiwerde" (purified) and "smelter" (fusionist) factions within the [[National Party (South Africa)|National Party]] and the National Party's subsequent fusion with the [[South African Party]].<ref>Dan O'Meara, ''Volkskapitalisme: class, capital, and ideology in the development of Afrikaner nationalism, 1934–1948'' (Cambridge University Press, 1983).</ref><ref>[https://www.country-studies.com/south-africa/the-great-depression-and-the-1930s.html The Great Depression and the 1930S] {{Webarchive|url=https://web.archive.org/web/20220102205937/https://www.country-studies.com/south-africa/the-great-depression-and-the-1930s.html |date=January 2, 2022 }}, Federal Research Division of the Library of Congress.</ref> Unemployment programs were begun that focused primarily on the white population.<ref>{{cite journal | last1 = Minnaar | first1 = Anthony | year = 1994 | title = Unemployment and relief measures during the Great Depression (1929–1934) | journal = Kleio | volume = 26 | issue = 1| pages = 45–85 | doi = 10.1080/00232084.1994.10823193 }}</ref> ===Soviet Union=== The Soviet Union was the world's only [[socialist state]] with very little international trade. Its economy was not tied to the rest of the world and was mostly unaffected by the Great Depression.<ref>Robert William Davies, Mark Harrison, and Stephen G. Wheatcroft, eds. ''The economic transformation of the Soviet Union, 1913–1945'' (Cambridge University Press, 1994)</ref> At the time of the Depression, the Soviet economy was growing steadily, fuelled by intensive investment in heavy industry. The apparent economic success of the Soviet Union at a time when the capitalist world was in crisis led many Western intellectuals to view the Soviet system favorably. Jennifer Burns wrote: {{blockquote|As the Great Depression ground on and unemployment soared, intellectuals began unfavorably comparing their faltering capitalist economy to Russian Communism. Karl Marx had predicted that capitalism would fall under the weight of its own contradictions, and now with the economic crisis gripping the West, his predictions seem to be coming true. By contrast Russia seemed an emblematic modern nation, making the staggering leap from a feudal past to an industrial future with ease.<ref>Jennifer Burns (2009).[https://books.google.com/books?id=z6e9X6JxHpMC&pg=PA34 ''Goddess of the Market: Ayn Rand and the American Right''] {{Webarchive|url=https://web.archive.org/web/20210415123811/https://books.google.com/books?id=z6e9X6JxHpMC&pg=PA34 |date=April 15, 2021 }}, p. 34. Oxford University Press. {{ISBN|0-19-532487-0}}</ref>}} The Great Depression caused mass immigration to the Soviet Union, mostly from Finland and Germany. Soviet Russia was at first happy to help these immigrants settle, because they believed they were victims of capitalism who had come to help the Soviet cause. However, when the Soviet Union entered the war in 1941, most of these Germans and Finns were arrested and sent to Siberia, while their Russian-born children were placed in orphanages. Their fate remains unknown.<ref>{{cite web|url=https://www.genealogia.fi/emi/art/article237e.htm|title=Illegal Emigration to the U.S.S.R. During the Great Depression|website=www.genealogia.fi|access-date=September 19, 2016|archive-date=February 24, 2021|archive-url=https://web.archive.org/web/20210224141430/https://www.genealogia.fi/emi/art/article237e.htm|url-status=dead}}</ref> ===Spain=== {{Main|Economic history of Spain}} Spain had a relatively isolated economy, with high protective tariffs and was not one of the main countries affected by the Depression. The banking system held up well, as did agriculture.<ref>Gabriel Tortella and Jordi Palafox, "Banking and Industry in Spain 1918–1936", ''Journal of European Economic History'' (1984), 13#2 Special Issue, pp. 81–110.</ref> By far the most serious negative impact came after 1936 from the heavy destruction of infrastructure and manpower by the [[Spanish Civil War|civil war, 1936–39]]. Many talented workers were forced into permanent exile. By staying neutral in the Second World War, and selling to both sides{{clarify|date=March 2020}}, the economy avoided further disasters.<ref>R.J. Harrison, ''Economic History of Modern Spain'' (1978), pp. 129–49.</ref> ===Sweden=== {{Main|Economy of Sweden}} By the 1930s, Sweden had what America's ''Life magazine'' called in 1938 the "world's highest standard of living". Sweden was also the first country worldwide to recover completely from the Great Depression. Taking place amid a short-lived government and a less-than-a-decade old Swedish democracy, events such as those surrounding [[Ivar Kreuger]] (who eventually committed suicide) remain infamous in Swedish history. The [[Swedish Social Democratic Party|Social Democrats]] under [[Per Albin Hansson]] formed their first long-lived government in 1932 based on strong [[Interventionism (economics)|interventionist]] and [[welfare state]] policies, monopolizing the office of [[Prime Minister of Sweden|Prime Minister]] until 1976 with the sole and short-lived exception of [[Axel Pehrsson-Bramstorp]]'s "summer cabinet" in 1936. During forty years of hegemony, it was the most successful political party in the history of Western liberal democracy.<ref>[[Göran Therborn]], "A Unique Chapter in the History of Democracy: The Swedish Social Democrats", in K. Misgeld et al. (eds), ''Creating Social Democracy'', University Park, Penn State University Press, 1996.</ref> ===Thailand=== In Thailand, then known as the [[Rattanakosin Kingdom|Kingdom of Siam]], the Great Depression contributed to the end of the [[Prajadhipok#Last absolute monarch|absolute monarchy of King Rama VII]] in the [[Siamese revolution of 1932]].<ref>{{cite book |last=Handley |first=Paul M. |title=The King Never Smiles: A Biography of Thailand's Bhumibol Adulyadej |publisher=Yale University Press |year=2006 |location=New Haven and London|page=37 }}</ref> ===United Kingdom=== {{Main|Great Depression in the United Kingdom|Interwar Britain}} [[File:Bundesarchiv Bild 102-10246, England, Arbeitslose vor Gewerkschaftshaus.jpg|thumb|right|Unemployed people in front of a workhouse in London, 1930]] The World Depression broke at a time when the United Kingdom had still not fully recovered from the effects of the [[World War I|First World War]] more than a decade earlier. The country was driven off the [[gold standard]] in 1931. The world financial crisis began to overwhelm Britain in 1931; investors around the world started withdrawing their gold from London at the rate of £2.5 million per day.<ref name="David Williams 1963"/> Credits of £25 million each from the Bank of France and the Federal Reserve Bank of New York and an issue of £15 million fiduciary note slowed, but did not reverse the British crisis. The financial crisis now caused a major political crisis in Britain in August 1931. With deficits mounting, the bankers demanded a balanced budget; the divided cabinet of Prime Minister Ramsay MacDonald's Labour government agreed; it proposed to raise taxes, cut spending and most controversially, to cut unemployment benefits by 20%. The attack on welfare was totally unacceptable to the Labour movement. MacDonald wanted to resign, but King George V insisted he remain and form an all-party coalition "[[National Government (United Kingdom)|National Government]]". The Conservative and Liberals parties signed on, along with a small cadre of Labour, but the vast majority of Labour leaders denounced MacDonald as a traitor for leading the new government. Britain went off the gold standard, and suffered relatively less than other major countries in the Great Depression. In the 1931 British election, the Labour Party was virtually destroyed, leaving MacDonald as prime minister for a largely Conservative coalition.<ref>Charles Loch Mowat, ''Britain between the wars, 1918–1940'' (1955) pp. 386–412.</ref><ref name="John Oxborrow 1976 pp. 67-73"/> The effects on the northern industrial areas of Britain were immediate and devastating, as demand for traditional industrial products collapsed. By the end of 1930 unemployment had more than doubled from 1 million to 2.5 million (20% of the insured workforce), and exports had fallen in value by 50%. In 1933, 30% of [[Glasgow|Glaswegians]] were unemployed due to the severe decline in heavy industry. In some towns and cities in the north east, unemployment reached as high as 70% as shipbuilding fell by 90%.<ref>[https://www.thegreatdepression.co.uk/unemployment-during-the-great-depression/ Unemployment During The Great Depression] {{webarchive|url=https://web.archive.org/web/20090124124118/https://thegreatdepression.co.uk/unemployment-during-the-great-depression |date=January 24, 2009 }}, thegreatdepression.co.uk</ref> The [[National Hunger March, 1932|National Hunger March]] of September–October 1932 was the largest<ref>Cook, Chris and Bewes, Diccon; ''What Happened Where: A Guide To Places And Events In Twentieth-Century History'' p. 115; Routledge, 1997 {{ISBN|1-85728-533-6}}</ref> of a series of [[hunger marches]] in Britain in the 1920s and 1930s. About 200,000 unemployed men were sent to the work camps, which continued in operation until 1939.<ref>[https://news.bbc.co.uk/2/hi/uk_news/scotland/7842448.stm "Work camps that tackled Depression"] {{Webarchive|url=https://web.archive.org/web/20220106193754/http://news.bbc.co.uk/2/hi/uk_news/scotland/7842448.stm |date=January 6, 2022 }}, BBC News.</ref> In the less industrial [[English Midlands|Midlands]] and [[Southern England]], the effects were short-lived and the later 1930s were a prosperous time. Growth in modern manufacture of electrical goods and a boom in the motor car industry was helped by a growing southern population and an expanding [[middle class]]. Agriculture also saw a boom during this period.<ref name="Social Conditions in Britain 1918–1939">[[Stephen Constantine (historian)|Constantine, Stephen]] (1983), ''Social Conditions in Britain 1918–1939'', {{ISBN|0-416-36010-6}}</ref> ===United States=== {{Main|Great Depression in the United States|The New Deal}} [[File:Unemployed men queued outside a depression soup kitchen opened in Chicago by Al Capone, 02-1931 - NARA - 541927.jpg|thumb|Unemployed men standing in line outside a depression soup kitchen in Chicago, 1931]] Hoover's first measures to combat the depression were based on encouraging businesses not to reduce their workforce or cut wages but businesses had little choice: wages were reduced, workers were laid off, and investments postponed.<ref name="Peter Clemens 1954, p. 114">Peter Clemens, ''Prosperity, Depression and the New Deal: The USA 1890–1954'', Hodder Education, 4. Auflage, 2008, {{ISBN|978-0-340-96588-7}}, p. 114.</ref><ref>Charles R. Morris, ''A Rabble of Dead Money: The Great Crash and the Global Depression: 1929–1939'' (PublicAffairs, 2017), 389 pp. [https://www.nytimes.com/2017/04/21/books/review/rabble-of-dead-money-charles-r-morris-great-depression-wall-street.html online review] {{Webarchive|url=https://web.archive.org/web/20170424184720/https://www.nytimes.com/2017/04/21/books/review/rabble-of-dead-money-charles-r-morris-great-depression-wall-street.html |date=April 24, 2017 }}</ref> In June 1930, Congress approved the [[Smoot–Hawley Tariff Act]] which raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. Most countries that traded with the U.S. increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression.<ref>[https://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html "Smoot-Hawley Tariff"] {{webarchive|url=https://web.archive.org/web/20090312055958/https://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html |date=March 12, 2009 }}, ''U.S. Department of State''.</ref> In 1931, Hoover urged bankers to set up the [[National Credit Corporation]]<ref>{{cite encyclopedia|url=https://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstruction |title=Reconstruction Finance Corporation|encyclopedia=EH.net Encyclopedia|archive-url=https://web.archive.org/web/20131029205418/https://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstruction |archive-date=October 29, 2013 }}</ref> so that big banks could help failing banks survive. But bankers were reluctant to invest in failing banks, and the National Credit Corporation did almost nothing to address the problem.<ref>Clemens, ''Prosperity, Depression and the New Deal'', 2008, p. 113.</ref> [[File:evictbonusarmy.jpg|thumb|left|Burning shacks on the Anacostia flats, Washington, D.C., put up by the [[Bonus Army]] (World War I veterans) after the marchers with their wives and children were driven out by the regular Army by order of [[Herbert Hoover|President Hoover]], 1932<ref>[https://www.nps.gov/archive/elro/glossary/great-depression.htm The Great Depression (1929–1939)], The Eleanor Roosevelt Papers. {{webarchive |url=https://web.archive.org/web/20081223191011/https://www.nps.gov/archive/elro/glossary/great-depression.htm |date=December 23, 2008 }}</ref>]] By 1932, unemployment had reached 23.6%, peaking in early 1933 at 25%.<ref>{{cite journal |last1= Swanson |first1= Joseph | last2 = Williamson |first2= Samuel |year= 1972 |title = Estimates of national product and income for the United States economy, 1919–1941 |journal= Explorations in Economic History |volume= 10 |pages= 53–73 |doi = 10.1016/0014-4983(72)90003-4 }}</ref> Those releasing from prison during this period had an especially difficult time finding employment given the stigma of their criminal records, which often led to recidivism out of economic desperation.<ref name="PDN2"/> Drought persisted in the agricultural heartland, businesses and families defaulted on record numbers of loans, and more than 5,000 banks had failed.<ref>[https://encarta.msn.com/encyclopedia_761584403/great_depression_in_the_united_states.html "Great Depression in the United States"] {{Webarchive|url=https://web.archive.org/web/20091028014002/http://encarta.msn.com/encyclopedia_761584403/Great_Depression_in_the_United_States.html |date=October 28, 2009 }}, ''Microsoft Encarta''. [https://web.archive.org/web/20091028014002/http://encarta.msn.com/encyclopedia_761584403/Great_Depression_in_the_United_States.html Archived] October 31, 2009.</ref> Hundreds of thousands of Americans found themselves homeless, and began congregating in [[shanty town]]s – dubbed "[[Hooverville]]s" – that began to appear across the country.<ref>Joyce Bryant, [https://www.yale.edu/ynhti/curriculum/units/1998/4/98.04.04.x.html "The Great Depression and New Deal"] {{Webarchive|url=https://web.archive.org/web/20160721191938/http://www.yale.edu/ynhti/curriculum/units/1998/4/98.04.04.x.html |date=July 21, 2016 }}, ''Yale-New Haven Teachers Institute''.</ref> In response, President Hoover and Congress approved the [[Federal Home Loan Bank Act]], to spur new home construction, and reduce foreclosures. The final attempt of the Hoover Administration to stimulate the economy was the passage of the [[Emergency Relief and Construction Act]] (ERA) which included funds for [[public works]] programs such as dams and the creation of the [[Reconstruction Finance Corporation]] (RFC) in 1932. The Reconstruction Finance Corporation was a Federal agency with the authority to lend up to $2 billion to rescue banks and restore confidence in financial institutions. But $2 billion was not enough to save all the banks, and [[bank run]]s and bank failures continued.<ref name="Peter Clemens 1954, p. 114"/> Quarter by quarter the economy went downhill, as prices, profits and employment fell, leading to the [[Realigning election|political realignment]] in 1932 that brought to power [[Franklin Delano Roosevelt]]. [[File:Dust Bowl - Dallas, South Dakota 1936.jpg|thumb|Buried machinery in a barn lot; [[South Dakota]], May 1936. The [[Dust Bowl]] on the Great Plains coincided with the Great Depression.<ref>[https://eh.net/encyclopedia/article/Cunfer.DustBowl The Dust Bowl], Geoff Cunfer, Southwest Minnesota State University. {{webarchive |url=https://web.archive.org/web/20081228070418/https://eh.net/encyclopedia/article/Cunfer.DustBowl |date=December 28, 2008 }}</ref>]] Shortly after President [[Franklin Delano Roosevelt]] was inaugurated in 1933, drought and erosion combined to cause the [[Dust Bowl]], shifting hundreds of thousands of [[displaced persons]] off their farms in the Midwest. From his inauguration onward, Roosevelt argued that restructuring of the economy would be needed to prevent another depression or avoid prolonging the current one. New Deal programs sought to stimulate [[demand]] and provide work and relief for the impoverished through increased government spending and the institution of financial reforms. During a "bank holiday" that lasted five days, the [[Emergency Banking Act]] was signed into law. It provided for a system of reopening sound banks under [[United States Department of Treasury|Treasury]] supervision, with federal loans available if needed. The [[Securities Act of 1933]] comprehensively regulated the securities industry. This was followed by the [[Securities Exchange Act of 1934]] which created the [[Securities and Exchange Commission]]. Although amended, key provisions of both Acts are still in force. Federal insurance of [[Deposit account|bank deposits]] was provided by the [[Federal Deposit Insurance Corporation|FDIC]], and the [[Glass–Steagall Act]]. The [[Agricultural Adjustment Act]] provided incentives to cut farm production in order to raise farming prices. The [[National Recovery Administration]] (NRA) made a number of sweeping changes to the American economy. It forced businesses to work with government to set price codes through the NRA to fight [[deflation]]ary "cut-throat competition" by the setting of minimum prices and [[Minimum wage|wages]], labor standards, and competitive conditions in all industries. It encouraged unions that would raise wages, to increase the [[purchasing power]] of the [[working class]]. The NRA [[Schechter v. United States|was deemed unconstitutional]] by the [[Supreme Court of the United States]] in 1935. [[File:Civilian Conservation Corps - NARA - 195832.jpg|thumb|left|[[Civilian Conservation Corps|CCC]] workers constructing drainage culvert, 1933. Over 3 million unemployed young men were taken out of the cities and placed into 2,600+ work camps managed by the CCC.<ref>{{cite web |url=https://www.nationalparkstraveler.com/2008/09/park-history-spirit-civilian-conservation-corps |title=National Park History: "The Spirit of the Civilian Conservation Corps" |publisher=Nationalparkstraveler.com |access-date=September 4, 2010 |archive-url=https://web.archive.org/web/20100905182850/https://www.nationalparkstraveler.com/2008/09/park-history-spirit-civilian-conservation-corps |archive-date=September 5, 2010 |url-status=dead }}</ref>]] These reforms, together with several other relief and recovery measures, are called the [[First New Deal]]. Economic stimulus was attempted through a new [[Alphabet agencies|alphabet soup of agencies]] set up in 1933 and 1934 and previously extant agencies such as the [[Reconstruction Finance Corporation]]. By 1935, the "[[Second New Deal]]" added [[Social Security (United States)|Social Security]] (which was later considerably extended through the [[Fair Deal]]), a jobs program for the unemployed (the [[Works Progress Administration]], WPA) and, through the [[National Labor Relations Board]], a strong stimulus to the growth of labor unions. In 1929, federal expenditures constituted only 3% of the [[Gross domestic product|GDP]]. The national debt as a proportion of GNP rose under Hoover from 20% to 40%. Roosevelt kept it at 40% until the war began, when it soared to 128%. By 1936, the main [[economic indicator]]s had regained the levels of the late 1920s, except for unemployment, which remained high at 11%, although this was considerably lower than the 25% unemployment rate seen in 1933. In the spring of 1937, American industrial production exceeded that of 1929 and remained level until June 1937. In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget.<ref>Robert Goldston, ''The Great Depression'', Fawcett Publications, 1968, p. 228.</ref> The American economy then took a sharp downturn, lasting for 13 months through most of 1938. Industrial production fell almost 30 per cent within a few months and production of [[durable good]]s fell even faster. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938.<ref>''Economic Fluctuations'', Maurice W. Lee, Chairman of Economics Dept., Washington State College, published by R.D. Irwin Inc, Homewood, Illinois, 1955, p. 236.</ref> Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.<ref>''Business Cycles'', James Arthur Estey, Purdue University, Prentice-Hall, 1950, pp. 22–23 chart.</ref> [[File:Wpa1.JPG|thumb|The [[Works Progress Administration|WPA]] employed 2–3 million at unskilled labor.]] Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production. By May 1938 retail sales began to increase, employment improved, and industrial production turned up after June 1938.<ref>Maurice W. Lee, 1955.</ref> After the recovery from the Recession of 1937–38, conservatives were able to form a bipartisan [[conservative coalition]] to stop further expansion of the New Deal and, when unemployment dropped to 2% in the early 1940s, they abolished WPA, CCC and the PWA relief programs. Social Security remained in place. Between 1933 and 1939, federal expenditure tripled, and Roosevelt's critics charged that he was turning America into a [[Socialism|socialist]] state.<ref>Schlesinger, Jr., Arthur M. ''The Coming of the New Deal: 1933–1935.'' Paperback ed. New York: Houghton Mifflin, 2003 [1958]. {{ISBN|0-618-34086-6}}; Schlesinger, Jr., Arthur M. ''The Politics of Upheaval: 1935–1936.'' Paperback ed. New York: Houghton Mifflin, 2003 [1960]. {{ISBN|0-618-34087-4}}</ref> The Great Depression was a main factor in the implementation of [[social democracy]] and [[planned economy|planned economies]] in European countries after World War II (see [[Marshall Plan]]). [[Keynesianism]] generally remained the most influential economic school in the United States and in parts of Europe until the periods between the 1970s and the 1980s, when [[Milton Friedman]] and other [[neoliberal]] economists formulated and propagated the newly created theories of [[neoliberalism]] and incorporated them into the [[Chicago School of Economics]] as an alternative approach to the study of economics. Neoliberalism went on to challenge the dominance of the Keynesian school of Economics in the mainstream academia and policy-making in the United States, having reached its peak in popularity in the election of the presidency of [[Ronald Reagan]] in the United States, and [[Margaret Thatcher]] in the [[United Kingdom]].<ref>[[Lanny Ebenstein]], ''Milton Friedman: A Biography'' (2007).</ref> Summary: Please note that all contributions to Christianpedia may be edited, altered, or removed by other contributors. 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