The Great Depression was not a sudden total collapse. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929.[6] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the northern summer of 1930.
In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing.[citation needed] By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the American economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.
Debt is seen as one of the causes of the Great Depression
Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade.
The effects on the industrial areas of Britain were immediate and devastating, as demand for British 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%. Government revenues contracted as national income fell, while the cost of assisting the jobless rose. The industrial areas were hardest hit, along with the coal mining districts. London and the south-east of England were hurt less. In 1933, 30% of Glaswegians were unemployed due to the severe decline in heavy industry.
In an effort to balance the budget and restore confidence in the pound, on the 10 September 1931 the new national government issued an emergency budget, which immediately instituted a round of draconian cuts in public spending and wages. Public sector wages and unemployment pay were cut by 10%, and income tax was raised from 4s 6d to 5s in the pound[6] (from 22.5% to 25%). The pay cuts did not go down well however and resulted in a Mutiny in the Royal Navy.
A government report in the mid 1930s estimated that around 25% of the UK's population existed on a subsistence diet, often with signs of child malnutrition such as Scurvy, Rickets and Tuberculosis.
The North and Wales remained severely depressed for most of the decade. In severely depressed parts of the country, the government enacted a number of policies to stimulate growth and reduce unemployment, including road building, loans to shipyards, and tariffs on steel imports. These policies helped but were not, however, on a sufficiently large scale to make a huge impact on the unemployment levels.
What got the world out of this slump?
From 1936 onwards the National Government followed a policy of mass rearmament in the face of the rise of Nazi Germany. This provided the economic stimulus that finally ended the depression.
Great.. so the last one lasted 7 years and was only stopped because we needed to start a world war with Hitler..
http://en.wikipedia.org/wiki/Great_Depression
In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing.[citation needed] By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the American economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.
Debt is seen as one of the causes of the Great Depression
Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade.
The effects on the industrial areas of Britain were immediate and devastating, as demand for British 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%. Government revenues contracted as national income fell, while the cost of assisting the jobless rose. The industrial areas were hardest hit, along with the coal mining districts. London and the south-east of England were hurt less. In 1933, 30% of Glaswegians were unemployed due to the severe decline in heavy industry.
In an effort to balance the budget and restore confidence in the pound, on the 10 September 1931 the new national government issued an emergency budget, which immediately instituted a round of draconian cuts in public spending and wages. Public sector wages and unemployment pay were cut by 10%, and income tax was raised from 4s 6d to 5s in the pound[6] (from 22.5% to 25%). The pay cuts did not go down well however and resulted in a Mutiny in the Royal Navy.
A government report in the mid 1930s estimated that around 25% of the UK's population existed on a subsistence diet, often with signs of child malnutrition such as Scurvy, Rickets and Tuberculosis.
The North and Wales remained severely depressed for most of the decade. In severely depressed parts of the country, the government enacted a number of policies to stimulate growth and reduce unemployment, including road building, loans to shipyards, and tariffs on steel imports. These policies helped but were not, however, on a sufficiently large scale to make a huge impact on the unemployment levels.
What got the world out of this slump?
From 1936 onwards the National Government followed a policy of mass rearmament in the face of the rise of Nazi Germany. This provided the economic stimulus that finally ended the depression.
Great.. so the last one lasted 7 years and was only stopped because we needed to start a world war with Hitler..
http://en.wikipedia.org/wiki/Great_Depression
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