USA Depression, The Great Depression information ( USA) - Pictures, causes of the Great depression.

These exceptions may seem more numerous than the rule, but the United States and most parts of Europe did enjoy relatively favorable economic conditions between 1924 and 1930. But it turned out that this prosperity rested on American loans and American markets, which now almost vanished. A European economy still recovering from the trauma of the war and its aftermath was too frail to weather this storm.
 

Indices of Industrial Production, 1929-1938,
in Major European Countries
(1937 = 100)
Year 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938
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France 123 123 105 91 94 92 88 95 100 92
Germany 79 69 56 48 54 67 79 90 100 92
Italy 90 85 77 77 82 80 86 86 100 100
Gr. Br. 77 74 69 69 73 80 82 94 100 101
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Unemployment (in thousands)

1929 1930 1931 1932 1933 1934 1935 1936 1937 1938
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France neglig. 13 64 301 305 368 464 470 380 402
Germany 1,899 3,070 4,520 5,575 4,804 2,718 2,151 1,593 912 429
Italy 301 425 734 1,006 1,019 964 - - 874 810
Gr. Br. 1,216 1,917 2,630 2,745 2,521 2,159 2,036 1,755 1,484 1,791
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The business cycle had long had its ups and downs. If this downswing turned out to be words than any previous one, the reason must be sought in the profound structural changes heaped on top of a normal cycle. Fulcrum of the world economy, the United States had not yet learned how to play that part, as its erratic financial policies and high protective tariffs indicated. Deeper changes were going on in the world. Policies of "autarchy" had developed after the war an were to be perpetuated during the Great Depression; that is, countries that were no longer prepared to trust the international order tried to insulate their economies by tariffs, import quotas, or a managed currency. During the 1920s, while sometimes readjusting the rate at which their currencies were exchanged for gold, most nations clung to the gold standard, which facilitated international trade by permitting currencies to be freely exchanged in terms of gold. But beginning in 1931, when Great Britain was driven off the gold standard, country after country left it in order to protect themselves against a flight of gold leading to deflation and unemployment. The flight from gold was followed by all kinds of nationalist economic policies - exchange controls, import quotas, tariffs. International trade was thus further impaired.
 

One of the most punishing features of the depression had been the drastic fall in agricultural prices, together with other primary products. The years from 1925 to 1928 brought good harvests all over the world, the latter a record in wheat. The price of grain tumbled just as the industrial and financial slump hit, compounding the crisis. Loss of urban and international markets afflicted farmers already in trouble from overproduction and, frequently, from a burden of debt incurred in expanding production and buying agricultural machinery. With unemployed workers suffering from hunger, the sight of farmers refusing to harvest crops because the price was too low to make it worthwhile drove home the bitter lesson of poverty in the midst of plenty, the curse of Midas fallen on man. But by 1936 agricultural prices had risen somewhat........

By 1933, 26.6% of people who were wage earners were unemployed. Workers were either fired, laid off, or had extra work to do with less pay if they still had their job. The domestic market was affected and many lost their lands because they couldn't keep up with the payments, and most factory workers had to work twice as had to earn the same amount of money they did before the Depression hit.


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