Recovered the loan to the Austrian Bank, but this was not enough to pay off the debt. The catastrophe bankrupted the system in many countries of Central and Eastern Europe: it led German bankers to defer repayment of their foreign debts in order to protect themselves, and in turn also endangered British bankers who had invested heavily in Germany. The shortage of capital, in all industrialized countries, brought about a sharp reduction in exports and domestic consumption: the absence of markets inevitably led to the closure of factories, and the fewer the goods, the fewer the transport of goods, which inevitably jeopardized the shipping and shipbuilding industries. In all countries, the consequence of the recession was mass unemployment: 13.7 million in the United States, 5.6 million in Germany and 2.8 million in the United Kingdom (the maximum figure for 1932). The Great Depression also had a major impact on Latin America, resulting in the loss of foreign investment and merchandise exports in a region almost completely dominated by European and American bankers and merchant entrepreneurs.
Edit The Great Depression
Causes
The Great Depression (1929-1933), People Waiting for Relief (Roosevelt Memorial, Washington)
There are a variety of theories of the cycle of commerce in the world of economics, and when analyzing the causes of the Great Depression, there are many differing views and disagreements. [1] Perhaps the best account of the cause of the depression is that the decrease in spending by one or a few social groups exceeded the increase in spending by others.In 1929, consumers purchased 72 percent of the gross national product, businessmen and industrialists invested and consumed 18 percent, and the various U.S. federal, state, and local governments used slightly less than 10 percent, with the rest going to exports. In 1929-1930, spending on the GNP fell by about $14 billion as investors and consumers reduced their spending by about $15 billion. Government spending increased slightly, but its effect was negligible. The decrease in investment and consumer spending was reflected in increased layoffs and unemployment in the labor market and lower sales and profits in business and industry. Based on the above analysis, it can be seen that the causes of the Great Depression can be determined by identifying the reasons for the decrease in consumer spending and business investment. Through historical analysis, it is clear that in the 1920s there were already a number of unfavorable trends in economic development that were ignored or disregarded at the time. Agriculture, on the other hand, never fully recovered from the post-war depression, and farmers remained poor throughout this period. In addition, the so-called higher wage levels in the industrial sector, many of which were illusory. Within the decade, the application of new machinery crowded out large numbers of workers. For example, in the years 1920-1929, the total value of industrial output increased by almost 50 per cent without an increase in the number of industrial workers, and the number of workers in the transportation industry actually decreased. The largest increase in workers occurred in the service sector, where wages were very low, and which undoubtedly included many skilled workers who had lost their jobs as a result of technological progress. Thus the statistics which indicate a slight increase in wages do not seem to reflect the real situation. Since workers and peasants are the basic consumers, the economic difficulties experienced by these two groups must have an impact on the consumer goods market. Unemployment soared in the United States during the Great Depression
Under these circumstances, the expansion of advertising and the increase in installment credit sales in the 1920s had adverse consequences. Installment credit sales struggled to inflate the consumer goods market. In the years 1924-1929, installment sales increased from about two billion dollars to three and a half billion dollars, which is an astonishingly high rate of growth. Undoubtedly, the use of installment credit increased sales of consumer durables such as automobiles, radios, furniture, and household electrical appliances. However, the spread of installment sales is also indicative of the fact that the market for consumer goods cannot accommodate the large volume of products produced by the industrial sector without an increase in credit. Moreover, from an economic point of view, this method of selling and lending is inherently dangerous; as soon as consumer credit, i.e., installment sales, is cut back, consumer purchases are likely to be reduced. This seems to have happened in 1929. The expansion of industrial production in the twenties was made possible by the huge investment in new plants and equipment. This investment led to the employment of large numbers of workers in construction, machine tool manufacturing, and related sectors such as the steel industry. Consequently, as soon as capital expenditure or investment was reduced, there was mass unemployment of workers in all sectors of production of the means of production. By 1929, the market for consumer goods could not accommodate the increased production of goods, and there was no longer any need to expand plant and equipment. It is estimated, for example, that in 1929 the entire industry of the United States was at work at a rate of only 80 percent. Under these conditions, it is no wonder that investment (in 1958 dollars) fell from $40.4 billion in 1929 to $27.4 billion in 1930, and then to $4.7 billion in 1932. The reduction in investment led to the bankruptcy of productive enterprises and the unemployment of workers. This problem was exacerbated by the decline in housing construction. Housing construction, which had reached its peak in 1925, declined from then on; in 1929 only half a million houses were being built (in 1925 there were about a million), and after 1927 the automobile industry also declined sharply. Unemployment of workers in the production of the means of production leads to a decrease in the sales of consumer goods, which in turn leads to unemployment of workers in the production of consumer goods. Reduced sales of consumer goods, in turn, led to a further contraction of investment, and the increasing interplay between these two sectors drove production ever lower and unemployment ever higher. Even favorable factors such as low taxes and high profits may have contributed to the outbreak of the crisis. It now appears that much of the increased income of the period went to a few individuals or families, as a 1934 Brookings Institution paper on the economy of the 1920s put it: "The slums of the American poor during the Great Depression
"The United States showed a tendency toward an increasingly unequal distribution of income, at least in the period before and after the 1920s. at least around the 1920s. That is to say, the income of the masses increased during this period, and the income levels of the upper classes increased even more rapidly. Since the saving portion of their income increased faster than the consumption portion as the higher incomes of the upper classes were realized, there was also a tendency for the great tycoons and their families to invest more and more of their accumulated income." From an economic point of view, the distribution of income in the twenties had a tendency to tighten consumption to increase investment. A review of this period of history suggests that the national economy might have been stabilized with more money in the hands of consumers and less in the hands of investors.The stock market boom of 1929, caused to some extent by bank credit, also reflected an excess of capital that made it unprofitable for capitalists to invest in the purchase of plant and equipment. The prosperity of the 1920s was largely attributable to an abundance of natural resources, growth in industrial and agricultural production, technological advances, increased labor productivity, expanded consumption, and booming foreign trade. However, the poverty of many Americans and certain weaknesses in the national economy led to the onset of the Great Depression. Nevertheless, until the end of the twenties, most Americans were blindly optimistic that prosperity would continue.
After
Herbert Clark Hoover
The 1920s were known as the "New Era," and wealth and opportunity seemed to open their stingy doors to Americans, who had just won the First World War. Society as a whole was attracted to new technologies and lifestyles, and "conspicuous consumption" became the order of the day. President Hoover agreed that "we are on the eve of a decisive war on poverty, and the slums will disappear from America". On October 24, 1929, the U.S. had its "Black Thursday" (the sudden crash of the Wall Street stock market). On this day, the American financial world collapsed, stocks fell from the top into the abyss overnight, and prices fell so fast that even the automatic stock ticker display could not keep up. 1929 October 29th was a Tuesday, and on this day the New York stock market plummeted to the extreme, so some people also use "Black Tuesday" to refer to this event. In just two weeks from October 29 to November 13, 1929, $30 billion of wealth disappeared, equivalent to the total cost of the United States in World War I. But the collapse of the U.S. stock market was only the result of the collapse of the U.S. stock market, which was the result of the collapse of the U.S. stock market. But the collapse of the U.S. stock market was nothing more than the crater of the eruption of a disastrous economic crisis. A children's song was popular in New York at the time: "Mellon sounded the siren, Hoover rang the bell. Wall Street signaled that America was headed for hell!" (Mellon pulled the whistle, Hoover rang the bell, Wall Street gave the signal and the country went to hell) With the collapse of the stock market, the American economy was then plunged into a full-blown catastrophe, and a horrific chain reaction soon followed: Frantic runs, bank failures, factory closures, unemployment, poverty, organized resistance, and the brink of civil war. Agricultural capitalists and big farmers destroyed their "surplus" in huge quantities, used wheat and corn as fuel instead of coal, and poured milk into the Mississippi River, turning it into the "Milky Way". The homeless in the cities built crude shelters out of boards, old tin, tarpaulins, and even kraft paper, and these huts were gathered in villages called "Hoovervilles". The homeless man's food bag was called "Hoover bag", the car pulled by animal power due to the inability to buy fuel was called "Hoover car", and even the newspaper covering the homeless man on the street bench was called "Hoover blanket Even the newspaper covering the homeless on street benches was called a "Hoover Blanket". The apple vendor became one of the most recognizable symbols of the Depression. Many of those forced to make a living as itinerant fruit vendors were formerly successful businessmen and bankers. The stock market crash led to the Great Depression, which lasted four years and soon spread from the United States to other industrialized countries. For millions of people, life became a struggle for food, clothing and shelter. In order to safeguard their own interests, countries strengthened their trade protection measures and instruments, which further aggravated and worsened the world economic situation, which was an important root cause of the outbreak of the Second World War. The Great Depression also caused serious social problems: about 2-4 million secondary school students dropped out of school during the Great Depression; many committed suicide as they could not endure the physical and psychological pain; and social security deteriorated. The most important of these problems was unemployment. In the United States, the total number of unemployed people reached 8.3 million, and in various cities of the United States, the queues of poor people for food relief were as long as several blocks. In Britain, 5-7 million people were unemployed and had to wait in longer queues in the labor market. There was a change of mindset after the Great Depression. Workers awoke from the numbness of the 1920s and went on militant strikes. Liberals were attracted to the prosperity of the Soviet Union and became Marxists. And conservatives, fearing Bolshevism, increasingly turned to fascism. "Black Tuesday" On October 29, 1929, everyone on the New York Stock Exchange was caught up in selling stocks. The stock index plummeted an average of 40 points from its previous high of 363, and thousands of Americans watched their life savings go up in smoke in a matter of days. It was the darkest day in U.S. securities history, the most influential and harmful economic event in U.S. history, with repercussions spreading to Western countries and even the entire world. Since then, the United States and the world entered a decade-long period of economic depression. Therefore, this day is regarded as a landmark event of the opening of the Great Depression, and because it falls on a Tuesday, it is called "Black Tuesday".
Turnaround
Franklin Roosevelt
Early in 1933, Franklin Roosevelt was elected the 32nd President of the United States, replacing the burnt-out Hoover. He responded to the actual situation at that time, and complied with the will of the masses, and implemented a series of policy measures aimed at overcoming the crisis, which is known as "Roosevelt's New Deal" in history, and the main content of the New Deal can be summarized by the "three Rs", namely, Recovery ( The main content of the New Deal can be summarized by the "three Rs", namely, recovery ( Recover), relief (Relief), and reform (Reform). The Great Depression was triggered by a financial crisis caused by wild speculation. President Roosevelt's New Deal also began with financial reorganization. In the so-called "Hundred Days of New Deal" (March 9, 1933 to June 16, 1933) during the enactment of 15 important legislation, financial laws accounted for 1 / 3. Roosevelt was sworn in as president on March 4, 1933, the country is almost no bank business, checks can not be cashed in Washington. At Roosevelt's request, on March 9, the U.S. Congress passed the Emergency Banking Act, which decided to take individual reviews of banks and issue licenses to solvent banks, allowing them to resume business as soon as possible. From March 13 to 15, 14,771 banks have received licenses to reopen, compared with 25,568 before the outbreak of the crisis in 1929, eliminated 10,797. The extraordinary measures taken by Roosevelt to rectify the financial situation played a great role in cleaning up the mess and stabilizing the people. Public opinion commented that this action was like "a bolt of lightning in a dark and dreary sky". Roosevelt's efforts to consolidate the banks were accompanied by actions to strengthen the U.S. foreign economic position. From March 10, 1933 announced the cessation of gold exports, to take one after another major measures: April 5, announced the ban on private storage of gold and gold securities, U.S. currency to stop converting gold on April 19, banned the export of gold, giving up the gold standard; June 5, the abolition of public and private debt to gold; January 10, 1934, announced the issuance of national securities as a guarantee of $ 30 billion in paper money, and make the dollar devalued. billion dollars in paper money and devalued the dollar by 40.94%. The devaluation of the dollar strengthened the competitiveness of U.S. goods to the outside world. These measures played an important role in stabilizing the situation and diverting the blood circulation of economic life. During the "Hundred Days of New Deal", Roosevelt, while solving the banking problem, also tried his best to push the Congress to pass the Agricultural Adjustment Act and the National Industrial Recovery Act successively, which became the left and right arms of the whole New Deal. Roosevelt required capitalists to abide by the rules of "fair competition," setting the scale of production, price, and sales range of each enterprise; and setting minimum wages and maximum hours of work for workers, thus restricting monopolies and reducing and easing tense class conflicts. Having received the grudging support of big business, Roosevelt then did his best to win the support of small and medium-sized business owners. He said that while it was important for big business to accept the Industrial Recovery Act, "the area of fruitfulness lies with the small employers, whose contribution will be to provide new jobs for one to ten persons. These small employers are, in fact, an extremely important part of the backbone of the nation, and the success or failure of our program depends largely on them." The growth of small and medium-sized businesses has played a positive role in the stabilization of American society and the recovery of the economy. Another important element of the New Deal was relief work. In May 1933, Congress passed the Federal Emergency Relief Act and set up the Federal Emergency Relief Administration, which quickly allocated all kinds of relief funds to the states, and in the following year it changed simple relief to "food for work" to give the unemployed the opportunity to engage in public ******* undertakings, thus safeguarding the spirit of self-reliance and self-esteem of the unemployed. The spirit of self-reliance and self-esteem of the unemployed was maintained. In the early years of Roosevelt's administration, more than 17 million unemployed people and their relatives depended on the state and municipal governments and private charities for their livelihood. But this part of the financial resources relative to such a huge army of unemployed, is like a drop in the bucket. Only the federal government could solve this complex social problem. One of the first measures of Roosevelt's New Deal was the Civilian Resource Conservation Corps program, which Congress was urged to pass. The program specifically absorbed the age of 18 to 25 years old, strong and unemployed young people, engaged in tree planting and protection of forests, flood control, soil conservation, road construction, open forest fire lines and set up forest watchtowers, the first recruited 250,000 people, in the 1500 camps throughout the states labor. By the time the United States entered the war, more than two million young men had worked in this agency, opening up more than 7.4 million acres of state forests and a large number of state parks. On average, each person worked nine months per period, and the vast majority of the monthly wages were taken out as alimony, thus expanding relief and corresponding purchasing power throughout the community. For tens of millions of people dependent on the state, the city to feed, Roosevelt also urged Congress to pass the Federal Emergency Relief Act, the establishment of the Federal Relief Agency, a reasonable division of the federal government and the proportion of the use of the states, the development of preferential policies to encourage local governments to use for direct relief of the poor and unemployed. During the New Deal, the United States has a wide range of work relief agencies, can be divided into two systems: to engage in long-term goals of the engineering program based on the Public **** Works Department (the government has allocated more than $4 billion) and the Civil Works Administration (investment of nearly 1 billion U.S. dollars), the latter in the construction of 180,000 small-scale engineering projects across the country, including school buildings, bridges, levees, sewer systems and post offices and administrative offices, and other public **** buildings, the latter is the most important part of the New Deal. Public **** buildings, such as schoolhouses, bridges, causeways, sewer systems, and post offices and administrative offices, attracted 4 million people to work and found a place for a large number of unskilled unemployed workers. Later, several new workfare agencies were continued. The most famous of these were the $5 billion Congressional appropriation for the Works Projects Administration and the National Youth Administration, which was specifically targeted at young people and together employed 23 million people, more than half of the nation's labor force. To the eve of the Second World War, the federal government spent a variety of engineering costs and a smaller number of direct relief costs amounted to $18 billion, the U.S. government built nearly 1,000 airports, more than 12,000 stadiums, more than 800 school buildings and hospitals, not only for the craftsmen, unskilled laborers and the construction industry is the creation of employment opportunities, but also to the tens of thousands of unemployed artists to provide a variety of jobs, is by far the U.S. government's responsibility to the United States. It is by far the most ambitious and successful relief program ever undertaken by the U.S. government. This money passed through the pockets of workers, through different channels and consumption, and returned to the hands of capitalists, and became the "trigger water" to stimulate private consumption and personal investment with government investment. The second phase of the New Deal, which began in 1935, built on the foundation of the first phase, focusing on the passage of the Social Security Act, the National Labor Relations Act, the Public Utilities Act and other regulations to consolidate the results of the New Deal in the form of legislation. Roosevelt believed that a government "which fails to take care of the old and the sick, which fails to provide work for the strong, which fails to inject young people into the industrial system, which allows the shadow of insecurity to hang over every family, is not a government that can or should exist", and that social insurance should be responsible for Social security should be responsible for the entire life cycle, "from the cradle to the grave". To this end, the Social Security Act was enacted, and the law provided that any wage earner who retired at age 65 would receive a pension of between $10 and $85 per month, depending on the level of wages. Regarding unemployment insurance, Roosevelt explained, "It will not only help the individual to avoid going on the dole if he is laid off in the future, but by maintaining purchasing power it will also cushion a little the shock of economic hardship." Half of the premiums were to be paid by the active worker and half by the employer, each paying a premium equal to one percent of the worker's wages, and the other half was to be appropriated by the federal government. This social insurance law, reflecting the strong desire of the majority of working people, was welcomed and applauded by the vast majority of the American people. On May 24, 1937, Roosevelt submitted to Congress a widely publicized message on minimum wage and maximum hours legislation. The message recognized that "one-third of our population, the great majority of whom are engaged in agriculture or industry, are poorly fed, poorly clothed, and poorly housed"; and that "we must bear in mind that our goal is to improve, not to lower, the standard of living of those who are now malnourished, poorly clothed, and poorly housed. We know that overtime and low wages will not raise the national income when a large portion of our workers are not yet employed." By Congress failed to act on the bill and on October 12, 1937, Roosevelt reintroduced it until June 14, 1938, when it was passed. This was the Fair Labor Standards Act (also known as the Wage and Hour Act), and its key provisions included a 40-hour workweek with a 40-cent-per-hour minimum wage; a ban on child labor under the age of 16, and a ban on the use of workers under the age of 18 in hazardous industries. The provisions on minimum wage were later adjusted as the economy developed. These pieces of social legislation, although in the realm of social improvement, were of great benefit to the people in general and to wage earners in particular. In order to solve the problem of federal funding of the social security system, Roosevelt took the unprecedented step of introducing a progressive tax based on the amount of income and assets. A 31 percent tax was levied on net income of $50,000 and estates of $40,000, and 75 percent on estates of $5 million or more; the corporate tax, which used to be 13.75 percent across the board, was lowered to 12.5 percent on corporate income of up to $50,000, and was increased to 15 percent on $50,000 or more, under the 1935 tax law. By 1939, the New Deal implemented by President Roosevelt was a great success. The New Deal involved almost every aspect of social and economic life in the U.S. Most of the measures were specific considerations aimed at getting the U.S. out of the crisis and minimizing the consequences of the crisis, while others were visionary plans from the perspective of capitalism's long-term development goals, which had the immediate effect of enabling the U.S. to avoid a major economic meltdown and helping the U.S. to get out of the crisis. From 1935 onwards, almost all economic indicators in the United States steadily rebounded, with the gross national product increasing again from 74.2 billion dollars in 1933 to 204.9 billion dollars in 1939, and the number of unemployed people dropping from 17 million to 8 million, restoring national confidence in the national system and ridding it of the threat posed by fascism to the democratic system, so that the United States, in the midst of the crisis, avoided violent social upheavals. For the United States to participate in the anti-fascist war later created a favorable environment and conditions, and to a large extent determine the direction of social and economic development of the United States after World War II. It is true that the ultimate aim of Roosevelt's "New Deal" was to strengthen state capitalism in order to overcome the economic crisis and consolidate the capitalist system. "The New Deal was a kind of experimental therapy he tried to cure the diseases of the capitalist society when conventional therapies failed to work. As a matter of fact, some of the measures of the "New Deal" were inadequate, and this was always a reason for his political opponents to take issue with him. "Classes whose interests were hurt in the implementation of the New Deal also resisted and slandered it, and even the Industrial Recovery Act and two other bills, which were important elements of the New Deal in its early days, were ruled unconstitutional by the Supreme Court after a lapse of two years. However, as long as we really look at the "New Deal" with a historical materialist attitude, it is not difficult to see that the "New Deal" was the pulse of the economic and social life of the U.S. "so that people can get back to work, so that our business The slogan "to enable people to return to work and make our enterprises active again" is in line with the interests of the majority of the working people, and has fully aroused their enthusiasm. Roosevelt to maintain the normal operation of the national economy and to ensure the employment of citizens as the responsibility of the government, especially in the form of work relief to build a large number of projects, not only greatly alleviate the difficulties of unemployment, stimulate the early recovery of the economy, but also many of the infrastructure construction of the U.S. economy benefited infinitely. The New Deal left a large number of measures and policies to prevent the recurrence of the Great Depression, for the United States into the Second World War and the rapid rise of the post-war laid a solid foundation, Roosevelt has thus become the most popular president of the United States and the world public since Abraham Lincoln and forever recorded in history.
Effects
The general effects of the Great Depression led to: 1. increased government policy involvement in the economy, i.e., Keynesianism; 2. intensified economic nationalism in the form of tariffs; and 3. galvanized romantic-totalitarian political movements (e.g., the Nazis in Germany) that served as alternatives to ****tivism. The Great Depression, relative to other single causes, is the best explanation for the gradual right-winging of politics in continental Europe and Latin American countries between 1932 and 1938. 4. The rise of dictators such as Adolf Hitler and Benito Mussolini indirectly contributed to the outbreak of World War II.
Life