Canada and Great Depression Essay

Canada and Great Depression Essay.

The Stock Market crash in New York led people to hoard their money; as consumption fell, the American economy steadily contracted, 1929-32. Given the close economic links between the two countries, the collapse quickly affected Canada. Added to the woes of the prairies were those of Ontario and Quebec, whose manufacturing industries were now victims of overproduction. Massive lay-offs occurred and other companies collapsed into bankruptcy. This collapse was not as sharp as that in the United States, but was the second sharpest collapse in the world.

Canada did have some advantages over other countries, especially its extremely stable banking system that had no failures during the entire depression, compared to over 9,000 small banks that collapsed in the United States. Canada was hurt badly because of its reliance and other commodities, whose prices fell by over 50%, and because of the importance of international trade. In the 1920s about 25% of the Canadian Gross National Product was derived from exports. The first reaction of the U.

S. was to raise tariffs via the Smoot-Hawley Tariff Act, passed into law June 17, 1930.

This hurt the Canadian economy more than most other countries in the world, and Canada retaliated by raising its own rates on American imports and by switching business to the Empire.[19] In an angry response to Smoot–Hawley, Canada welcomed the British introduction of trade protectionism and a system of Commonwealth preference during the winter of 1931-32. It helped Canada avoid external default on their public debt during the Great Depression. Canada had a high degree of exposure to the international economy – for example, in the 1920s about 25% of the Canadian GDP came from exports – which left Canada susceptible to any international economic downturn.

The onset of the depression created critical balance of payment deficits, and it was largely the extension of imperial protection by Britain that gave Canada the opportunity to increase their exports to the British market. By 1938 Britain was importing more than twice the 1929 volume of products from Australia, while the value of products shipped from Canada more than doubled, despite the dramatic drop in prices. Thus, the British market played a vital role in helping Canada and Australia stabilize their balance of payments in the immensely difficult economic conditions of the 1930s.[20] [edit]Government reaction

At the Depression, the provincial and municipal governments were already in debt after an expansion of infrastructure and education during the 1920s. It thus fell to the federal government to try to improve the economy. When the Depression began Mackenzie King was Prime Minister. He believed that the crisis would pass, refused to provide federal aid to the provinces, and only introduced moderate relief efforts.

New Deal

The Bennett Government initially refused to offer large-scale aid or relief to the provinces, much to the anger of provincial premiers, but it eventually gave in and started a Canadian “New Deal” type of relief by 1935. By 1937, the worst of the Depression had passed, but it left its mark on the country’s economic landscape. Atlantic Canada was especially hard hit. Newfoundland (an independent dominion at the time) was bankrupt economically and politically and gave up responsible government by reverting to direct British control. World War I veterans built on a history of postwar political activism to play an important role in the expansion of state-sponsored social welfare in Canada.

Arguing that their wartime sacrifices had not been properly rewarded, veterans claimed that they were entitled to state protection from poverty and unemployment on the home front. The rhetoric of patriotism, courage, sacrifice, and duty created powerful demands for jobs, relief, and adequate pensions that should, veterans argued, be administered as a right of social citizenship and not a form of charity. At the local, provincial, and national political levels, veterans fought for compensation and recognition for their war service, and made their demands for jobs and social security a central part of emerging social policy.[21]

Blaming it on Bennett: A 1931 political cartoon suggests that Liberals had failed to take responsibility for their own errors. The Liberal Party lost the 1930 election to the Conservative Party, led by R.B. Bennett. Bennett, a successful western businessman, campaigned on high tariffs and large-scale spending. Make-work programs were begun, and welfare and other assistance programs became vastly larger. This led to a large federal deficit, however. Bennett became wary of the budget shortfalls by 1932, and cut back severely on federal spending. This only deepened the depression as government employees were put out of work and public works projects were canceled. One of the greatest burdens on the government was the Canadian National Railway (CNR). The federal government had taken over a number of defunct and bankrupt railways during World War I and the 1920s. The debt the government assumed was over $2 billion, a massive sum at the time, but during the boom years it seemed payable. The Depression turned this debt into a crushing burden.

Due to the decrease in trade, the CNR also began to lose substantial amounts of money during the Depression, and had to be further bailed out by the government. With falling support and the depression only getting worse, Bennett attempted to introduce policies based on the New Deal of Franklin Delano Roosevelt in the United States. Bennett thus called for a minimum wage, unemployment insurance, and other such programs. This effort was largely unsuccessful; the provinces challenged the rights of the federal government to manage these programs. The judicial and political failure of Bennett’s New Deal legislation shifted the struggle to reconstitute capitalism to the provincial and municipal levels of the state. Attempts to deal with the dislocations of the Great Depression in Ontario focused on the “sweatshop crisis” that came to dominate political and social discourse after 1934. Ontario’s 1935 Industrial Standards Act (ISA) was designed to bring workers and employers together under the auspices of the state to establish minimum wages and work standards.

The establishment of New Deal style industrial codes was premised on the mobilization of organized capital and organized labour to combat unfair competition, stop the spread of relief-subsidized labour, and halt the predations of sweatshop capitalism. Although the ISA did not bring about extensive economic regulation, it excited considerable interest in the possibility of government intervention. Workers in a diverse range of occupations, from asbestos workers to waitresses, attempted to organize around the possibility of the ISA. The importance of the ISA lies in what it reveals about the nature of welfare, wage labour, the union movement, competitive capitalism, business attitudes toward industrial regulation, and the role of the state in managing the collective affairs of capitalism.

The history of the ISA also suggests that “regulatory unionism,” as described by Colin Gordon in his work on the American New Deal, may have animated key developments in Canadian social, economic, and labour history.[22] The failure to help the economy led to the federal Conservative’s defeat in the 1935 election when the Liberals, still led by Mackenzie King, returned to power. The public at large lost faith in both the Liberal Party of Canada and the Conservative Party of Canada.

This caused the rise of a third party: the Cooperative Commonwealth Federation (a socialist party that achieved some success before joining the Canadian Labour Congress in 1961, becoming the New Democratic Party). With the worst of the Depression over. The government implemented some relief programs such as the National Housing Act and National Employment Commission, and it established Trans-Canada Airlines (1937, the predecessor to Air Canada). However, it took until 1939 and the outbreak of war for the Canadian economy to return to 1929 levels.

Canada and Great Depression Essay

Social Unrest Essay

Social Unrest Essay.

What Factors Contributed to the Social Unrest of the 1930’s and the 1940’s?What factors contributed to the social unrest of the 1930’s and the 1940’s? “As a consequence of the riot, the first awakenings of a new political awareness began to be felt in the hearts of black people, time and the remarkable foresight, courage and initiative of a few dedicated members of the majority were all that were required to crystallize this awareness into a mighty political force.” – Doris Johnson, the Quiet Revolution in the Bahamas: Family Islanders Press Limited -1972.

Numerous factors or elements contributed to the social issues of the 1930s and the 1940s. From social factors such as: crime, racism, lack of education and poverty to economic factors like: Unemployment, the 1929 Stock Market Crash, The Great Depression and underemployment. To think about it there were even political factors such as: the residents didn’t like who was in charge of the country, and they didn’t have a say or a vote.

The first economic issue that I am going to talk about is the 1929 stock Market crash which then leads into the Great Depression.

The world was in crisis when the stock market crashed in October, 1929 in New York on Wall Street. The stock market was one of the largest institutions in America. “While business tycoons were getting richer, the workers in their factories were poorly paid, the farmers were not receiving fair prices for their crops and therefore masses of people didn’t have enough money to buy what the factories were producing. Soon the factories came to a standstill and the workers were laid off their jobs. That was when panic hit Wall Street.” This is when investors rushed to sell shares which held in failing companies, and people rushed to the bank to withdraw their savings. While this happened, many companies were closing over night and banks were closing slowly but shortly. The effects of the Wall Street Crash caused a worldwide fall in commerce that would be remembered throughout History. Recently, the Stock Market fell in 2008 and caused a recession.

Many countries are still recovering from the down fall of the stocks. The second economic distress that the people were concerned about was unemployment. This came about when the Stock Market Crashed. This happened because Jobs were shut down; they had no wages coming into the household, so they had to line for the social services. “The factories which imported crops and raw materials from Africa, Asia, South America and the Caribbean could not afford to pay profitable prices and this was how the Depression affected West Indian sugar estates”. – A Cry from the Workplace. “In his testimony, Clifford Holbert a stone mason who was protecting a shop that he owned with his father relays the incident that took place at about 10 am on June 2. I was sitting on the counter and the leader who is called Johnson held his hand up and made a sign to the man. Johnson had a carpenter’s hammer in his hand. He made a sign to the men and said, “Come on, boys lets go in. I said to them. “Why don’t you behave yourselves, aren’t we all colored? They still came in. the others besides the leader had sticks, bottles and stones and some of them had empty sacs as if to put my property in. I was sitting on the counter with a shotgun on my knees.

They flocked around me and as they flocked around me the gun went off. The leader was taken up to the hospital as was dead.”- Account of a fatality by the proprietor of Bain Town store.(Source C) This then leads me into the distresses in the social factors of the 1930’s and 1940’s as crime was on the increase. This happened because people didn’t have any money to provide for their families, and they had to find ways in which they could provide for their families. Crime caused many people to live in fear, and this state or fear contributed greatly to the social unrest of the 1930’s and 1940’s. Also, they were racism and discrimination towards each other, the color bar a perfect example of racism and discrimination. “Only a small percentage of the population enjoyed secondary education and the elementary schools were controlled by the Government. Teaching was limited to the three R’s, very basic reading, writing and arithmetic”. – A Cry from the workplace. In the 1930’s and 1940’s many immigrants were returning home. Anti- immigration laws went into effect in the U.S.A and Britain. This cause many immigrants to return home.

This increase in population put a strain on the social services. Because of overpopulation the schools only could impart a little knowledge onto the children. Over population now contributes to some of the Government schools in The Bahamas. With the amount of children in one class a teacher could only teach little by little in the class time. If there is 36 children in a class, and the period is about half an hour. How much of the class time do you think the teacher could teach all 36 of the children. This problem would lead into people being distracted and not grasping the knowledge imparted to them, because they are not getting the attention needed for that class. This is when the lack of education plays an important role. Because people were uneducated they couldn’t get the jobs they wanted.

Therefore, underemployment as well as unemployment was high. This situation caused social unrest. Not allowing citizens to vote or from voicing their opinions also contributed to the social unrest in the 1930s and the 1940s. These are the two political factors that caused rioting in the little ole Nassau. The people felt that if they had a chance to vote, maybe they could vote for someone who cared about their problems. Many people felt they were in a hopeless place with no way of ever getting out. This is why there was social unrest. All in all there were many social, economic and political factors that contributed to the unrest of the citizens in the 1930’s and 1940’s.

Sources:

Doris Johnson, the Quiet Revolution in the Bahamas: Family Islanders Press Limited -1972. A Cry from the Workplace- West Indian History Book II
Www. Wikipedia .com

Social Unrest Essay

What Caused the Great Deppression Essay

What Caused the Great Deppression Essay.

The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s. It was the longest, most widespread, and deepest depression of the 20th century.

In the 21st century, the Great Depression is commonly used as an example of how far the world’s economy can decline. Cities all around the world were hit hard, especially those dependent on heavy industry.

Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s.

It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world’s economy can decline. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most. Some economies started to recover by the mid-1930s. In many countries, the negative effects of the Great Depression lasted until the end of World War II.

Start of the Great Depression

Economic historians usually attribute the start of the Great Depression to the sudden devastating collapse of US stock market prices on October 29, 1929, known as Black Tuesday; some dispute this conclusion, and see the stock crash as a symptom, rather than a cause, of the Great Depression. Even after the Wall Street Crash of 1929, optimism persisted for some time; John D. Rockefeller said that “These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.” The stock market turned upward in early 1930, returning to early 1929 levels by April. This was still almost 30% below the peak of September 1929. Together, government and business spent more in the first half of 1930 than in the corresponding period of the previous year.

On the other hand, consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent. Likewise, beginning in mid-1930, a severe drought ravaged the agricultural heartland of the US. By mid-1930, interest rates had dropped to low levels, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed. By May 1930, automobile sales had declined to below the levels of 1928. Prices in general began to decline, although wages held steady in 1930; but then a deflationary spiral started in 1931.

Conditions were worse 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 US 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 1930, a steady decline in the world economy had set in, which did not reach bottom until 1933.

Economic indicators

Change in economic indicators 1929–32

Causes

There were multiple causes for the first downturn in 1929. These include the structural weaknesses and specific events that turned it into a major depression and the manner in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like major bank failures and the stock market crash. In contrast, monetarist economists point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, as well as Britain’s decision to return to the gold standard at pre–World War I parities . Recessions and business cycles are thought to be a normal part of living in a world of inexact balances between supply and demand. What turns a normal recession or ‘ordinary’ business cycle into a depression is a subject of much debate and concern. Scholars have not agreed on the exact causes and their relative importance. The search for causes is closely connected to the issue of avoiding future depressions.

An even larger question is whether the Great Depression was primarily a failure on the part of free markets or a failure of government efforts to regulate interest rates, curtail widespread bank failures, and control the money supply. Current theories may be broadly classified into two main points of view and several heterodox points of view. There are demand-driven theories, most importantly Keynesian economics, but also including those who point to the breakdown of international trade, and Institutional economists who point to underconsumption and over-investment, malfeasance by bankers and industrialists, or incompetence by government officials. The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending.

Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets. Holding money became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand. There are the monetarists, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities, caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression. Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms. There are also various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists. For example, some new classical macroeconomists have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression. The Austrian school of economics focuses on the macroeconomic effects of money supply, and how central banking decisions can lead to over-investment .

Demand-driven

Keynesian

British economist John Maynard Keynes argued in General Theory of Employment Interest and Money that lower aggregate expenditures in the economy contributed to a massive decline in income and to employment that was well below the average. In such a situation, the economy reached equilibrium at low levels of economic activity and high unemployment. Keynes’ basic idea was simple: to keep people fully employed, governments have to run deficits when the economy is slowing, as the private sector would not invest enough to keep production at the normal level and bring the economy out of recession. Keynesian economists called on governments during times of economic crisis to pick up the slack by increasing government spending and/or cutting taxes. As the Depression wore on, Franklin D. Roosevelt tried public works, farm subsidies, and other devices to restart the US economy, but never completely gave up trying to balance the budget. According to the Keynesians, this improved the economy, but Roosevelt never spent enough to bring the economy out of recession until the start of World War II.

Breakdown of international trade

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. Most historians and economists partly blame the American Smoot-Hawley Tariff Act for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries. While foreign trade was a small part of overall economic activity in the U.S. and was concentrated in a few businesses like farming, it was a much larger factor in many other countries. The average ad valorem rate of duties on dutiable imports for 1921–1925 was 25.9% but under the new tariff it jumped to 50% in 1931–1935.

In dollar terms, American exports declined from about $5.2 billion in 1929 to $1.7 billion in 1933; but prices also fell, so the physical volume of exports only fell by half. Hardest hit were farm commodities such as wheat, cotton, tobacco, and lumber. According to this theory, the collapse of farm exports caused many American farmers to default on their loans, leading to the bank runs on small rural banks that characterized the early years of the Great Depression.

Debt deflation

Irving Fisher argued that the predominant factor leading to the Great Depression was over-indebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles. He then outlined 9 factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows:

# Debt liquidation and distress selling
# Contraction of the money supply as bank loans are paid off
# A fall in the level of asset prices
# A still greater fall in the net worths of business, precipitating bankruptcies
# A fall in profits
# A reduction in output, in trade and in employment.
# Pessimism and loss of confidence
# Hoarding of money
# A fall in nominal interest rates and a rise in deflation adjusted interest rates. Brokerage firms, in other words, would lend $9 for every $1 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets. Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending.

Monetarist

Monetarists, including Milton Friedman, argue that the Great Depression was mainly caused by monetary contraction, the consequence of poor policy-making by the American Federal Reserve System and continued crisis in the banking system. In this view, the Federal Reserve, by not acting, allowed the money supply as measured by the M2 to shrink by one-third from 1929–1933, thereby transforming a normal recession into the Great Depression. Friedman argued that the downward turn in the economy, starting with the stock market crash, would have been just another recession. The Federal Reserve allowed some large public bank failures – particularly that of the New York Bank of the United States – which produced panic and widespread runs on local banks, and the Federal Reserve sat idly by while banks collapsed.

He claimed that, if the Fed had provided emergency lending to these key banks, or simply bought government bonds on the open market to provide liquidity and increase the quantity of money after the key banks fell, all the rest of the banks would not have fallen after the large ones did, and the money supply would not have fallen as far and as fast as it did. With significantly less money to go around, businessmen could not get new loans and could not even get their old loans renewed, forcing many to stop investing. This interpretation blames the Federal Reserve for inaction, especially the New York branch. One reason why the Federal Reserve did not act to limit the decline of the money supply was regulation. At that time, the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act, which required 40% gold backing of Federal Reserve Notes issued.

By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit that could be backed by the gold in its possession. This credit was in the form of Federal Reserve demand notes. A “promise of gold” is not as good as “gold in the hand”, particularly when they only had enough gold to cover 40% of the Federal Reserve Notes outstanding. During the bank panics a portion of those demand notes were redeemed for Federal Reserve gold. Since the Federal Reserve had hit its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by a greater reduction in credit.

On April 5, 1933, President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates, coins and bullion illegal, reducing the pressure on Federal Reserve gold. decomposes the economic decline into a decline in the labor force, capital stock, and the productivity with which these inputs are used. This study suggests that theories of the Great Depression have to explain an initial severe decline but rapid recovery in productivity, relatively little change in the capital stock, and a prolonged depression in the labor force. This analysis rejects theories that focus on the role of savings and posit a decline in the capital stock.

Austrian School

Another explanation comes from the Austrian School of economics. Theorists of the “Austrian School” who wrote about the Depression include Austrian economist Friedrich Hayek and American economist Murray Rothbard, who wrote America’s Great Depression . In their view and like the monetarists, the Federal Reserve, which was created in 1913, shoulders much of the blame; but in opposition to the monetarists, they argue that the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. In the Austrian view it was this inflation of the money supply that led to an unsustainable boom in both asset prices and capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a significant economic contraction was inevitable. However, Hayek, unlike Rothbard, also believed, along with the monetarists, that the Federal Reserve further contributed to the problems of the Depression by permitting the money supply to shrink during the earliest years of the Depression.

Marxist

Karl Marx saw recession and depression as unavoidable under free-market capitalism as there are no restrictions on accumulations of capital other than the market itself. In the Marxist view, capitalism tends to create unbalanced accumulations of wealth, leading to over-accumulations of capital which inevitably lead to a crisis. This especially sharp bust is a regular feature of the boom and bust pattern of what Marxists term “chaotic” capitalist development. It is a tenet of many Marxist groupings that such crises are inevitable and will be increasingly severe until the contradictions inherent in the mismatch between the mode of production and the development of productive forces reach the final point of failure. At which point, the crisis period encourages intensified class conflict and forces societal change.

Inequality

Two economists of the 1920s, Waddill Catchings and William Trufant Foster, popularized a theory that influenced many policy makers, including Herbert Hoover, Henry A. Wallace, Paul Douglas, and Marriner Eccles. It held the economy produced more than it consumed, because the consumers did not have enough income. Thus the unequal distribution of wealth throughout the 1920s caused the Great Depression. According to this view, the root cause of the Great Depression was a global over-investment in heavy industry capacity compared to wages and earnings from independent businesses, such as farms. The solution was the government must pump money into consumers’ pockets. That is, it must redistribute purchasing power, maintain the industrial base, but re-inflate prices and wages to force as much of the inflationary increase in purchasing power into consumer spending. The economy was overbuilt, and new factories were not needed. Foster and Catchings recommended federal and state governments start large construction projects, a program followed by Hoover and Roosevelt.

Productivity shock

“It cannot be emphasized too strongly that the trends we are describing are long-time trends and were thoroughly evident prior to 1929. These trends are in nowise the result of the present depression, nor are they the result of the World War. On the contrary, the present depression is a collapse resulting from these long-term trends.” M. King Hubbert

The first three decades of the 20th century saw economic output surge with electrification, mass production and motorized farm machinery, and because of the rapid growth in productivity there was a lot of excess production capacity and the work week was being reduced. The dramatic rise in productivity of major industries in the U. S. and the effects of productivity on output, wages and the work week are discussed by Spurgeon Bell in his book Productivity, Wages, and National Income .

Turning point and recovery

In most countries of the world, recovery from the Great Depression began in 1933. It was the rollback of those same reflationary policies that led to the interrupting recession of 1937. One contributing policy that reversed reflation was the Banking Act of 1935, which effectively raised reserve requirements, causing a monetary contraction that helped to thwart the recovery. GDP returned to its upward slope in 1938. According to Christina Romer, the money supply growth caused by huge international gold inflows was a crucial source of the recovery of the United States economy, and that the economy showed little sign of self-correction.

The gold inflows were partly due to devaluation of the U.S. dollar and partly due to deterioration of the political situation in Europe. In their book, A Monetary History of the United States, Milton Friedman and Anna J. Schwartz also attributed the recovery to monetary factors, and contended that it was much slowed by poor management of money by the Federal Reserve System. Current Chairman of the Federal Reserve Ben Bernanke agrees that monetary factors played important roles both in the worldwide economic decline and eventual recovery. Bernanke, also sees a strong role for institutional factors, particularly the rebuilding and restructuring of the financial system, and points out that the Depression needs to be examined in international perspective.

Gold standard

Some economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility that did the most to make recovery possible. On the other hand, economists such as Friedrich Hayek and Murray Rothbard point out that the 19th century panics each had a shorter duration while also having occurred under the international gold standard, and that policies countries followed after casting off the gold standard, and what results followed, varied widely. Every major currency left the gold standard during the Great Depression. Great Britain was the first to do so. Facing speculative attacks on the pound and depleting gold reserves, in September 1931 the Bank of England ceased exchanging pound notes for gold and the pound was floated on foreign exchange markets. Great Britain, Japan, and the Scandinavian countries left the gold standard in 1931.

Other countries, such as Italy and the U.S., remained on the gold standard into 1932 or 1933, while a few countries in the so-called “gold bloc”, led by France and including Poland, Belgium and Switzerland, stayed on the standard until 1935–1936. According to later analysis, the earliness with which a country left the gold standard reliably predicted its economic recovery. For example, Great Britain and Scandinavia, which left the gold standard in 1931, recovered much earlier than France and Belgium, which remained on gold much longer. Countries such as China, which had a silver standard, almost avoided the depression entirely. The connection between leaving the gold standard as a strong predictor of that country’s severity of its depression and the length of time of its recovery has been shown to be consistent for dozens of countries, including developing countries. This partly explains why the experience and length of the depression differed between national economies.

World War II and recovery

The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression, though some consider that it did not play a very large role in the recovery. It did help in reducing unemployment. The rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilisation of manpower following the outbreak of war in 1939 ended unemployment. The US’ entry into the war in 1941 finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%. In the U.S., massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending the Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts.

Effects

The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. In some states, the desperate citizens turned toward nationalist demagoguery — the most infamous example being Adolf Hitler — setting the stage for World War II in 1939.

Australia

Australia’s dependence on agricultural and industrial exports meant it was one of the hardest-hit countries in the Western world. Falling export demand and commodity prices placed massive downward pressures on wages. Further, unemployment reached a record high of 29% in 1932, with incidents of civil unrest becoming common. After 1932, an increase in wool and meat prices led to a gradual recovery.

Canada

Harshly affected by both the global economic downturn and the Dust Bowl, Canadian industrial production had fallen to only 58% of the 1929 level by 1932, the second lowest level in the world after the United States, and well behind nations such as Britain, which saw it fall only to 83% of the 1929 level. Total national income fell to 56% of the 1929 level, again worse than any nation apart from the United States. Unemployment reached 27% at the depth of the Depression in 1933.

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 national leaders promoted the development of local industry in an effort to insulate the economy from future external shocks.

After six years of government 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 by means of government intervention. Prompted in part by the devastating 1939 Chillán earthquake, the Popular Front government of Pedro Aguirre Cerda created the Production Development Corporation 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.

France

The Depression began to affect France around 1931. France’s relatively high degree of self-sufficiency meant the damage was considerably less than in nations like Germany. Hardship and unemployment were high enough to lead to rioting and the rise of the socialist Popular Front. Ultra-nationalist groups also saw increased popularity, although democracy prevailed into World War II.

Germany

Germany’s Weimar Republic was hit hard by the depression, as American loans to help rebuild the German economy now stopped. Unemployment soared, especially in larger cities, and the political system veered toward extremism. The unemployment rate reached nearly 30% in 1932, bolstering support for the Nazi and Communist parties, which both rose in the years following the crash to altogether possess a Reichstag majority following the general election in July 1932. Repayments of the war reparations due by Germany were suspended in 1932 following the Lausanne Conference of 1932. By that time, Germany had repaid one eighth of the reparations. Hitler and the Nazi Party came to power in January 1933, establishing a totalitarian single-party state within months and initiating the path towards World War II, the most devastating conflict in world history.

What Caused the Great Deppression Essay

The Great Depression Essay

The Great Depression Essay.

Thesis Statement: “The Depression reached into every area of economic life, and thus into every area of social life as well.” I. There were different factors that lead to the Great Depression.

A. Construction and automobile industries began to decline due to lack of diversification. B. Supply was greater than consumer demands.

C. Crop prices were low, so farmers could pay off their debts.
D. International trade began to decline.
E. The international debt of World War I.
II. Stock market crash of 1929 was not the cause of the Great Depression. A. 9,000 American banks closed down due to bankruptcy between 1930 and 1933. B. The American gross national product dropped severely, 25% in 3 years.

III. Unemployment dropped significantly.

A. Americans thought in the way if they are unemployed, they were in personal failure. 1. A number of families looked to state and local public relief systems for survival. B. The Great Plains of the South and West was suffering in one of the worst droughts of all time.

1. Kansas’ soil had completely no moisture.

C. A great number of Okies from the Dust Bowl had traveled to California and other states. 1. The Okies had no land survived on either starvation wages or farm to farm picking. IV. The minorities in the Depression

A. African-Americans faced the most unemployment, homelessness, malnutrition, and diseases of all time. 1. The collapse in prices of cotton and other staple crops left them with no income. 2. Racial combats by the whites decreased employment for the African-Americans in the South. B. Half a million Mexican-Americans left the United States for Mexico in the first years of the Depression. 1. Mexican-Americans faced discrimination where they had very few accessibilities compared to an American citizen. C. Asian-Americans faced economic marginalization.

1. Educated Asian-Americans would not be acknowledged for their education.
2. Japanese American Citizens League was created to protect racial and ethnic minorities from discrimination.

V. Women’s role in the Depression

A. It was proper for a woman to work only at home, work should go to men. B. By the end of the Depression, 20% more women were working then at the beginning of the Depression. VI. The Depression produced significant traditional values and goals. A. The radio in the 1930s was common in the American family. B. The production of movies was affordable to the Americans to go out and watch. 1. Walt Disney produced animation and children’s entertainment. C. Literature and journalism in the 1930s brought voice in print. VII. Hoover’s response to the Great Depression was to gain public confidence in the economy. A. He had businessmen talk to labor leaders into increasing wages. B. Hoover constructed a program to assist the Agricultural economy. C. His popularity decreased, Democrats taking over the house and senate.

VIII. The Election of 1932 impact on society.

A. The Republic Party renominated Herbert Hoover for a second term of office.
B. Roosevelt was the runner for the Democratic Party.
1. Roosevelt won no doubt.
C. Hoover lost badly.
1. Hoover had only carried Pennsylvania, Connecticut, Vermont, New Hampshire, and Maine. Roosevelt accommodated the rest of the states winning. D. Democrats won both houses of Congress.

The Great Depression Essay

The Dust Bowl Essay

The Dust Bowl Essay.

•Well, the Great Depression of the 1930s was one of the main factors that caused the Dust Bowl of the same period but it was not the MAIN CONTRIBUTING factor that lead to the ecological disaster. The other guilty parties like the unusually high temperatures of the environment, the lengthened droughts during the 1930s and also the poor agricultural farming practices made by the farmer, which lead to the top-soil eroding rapidly, increasing the devastation of the DB The poor farming practices made by the inexperienced or ignorant farmers caused many of the fertile top-soils to be blown away by the wind, leaving the land inhospitable for growing crops and any other basic necessities.

This was the main catalyst for the “black blizzards” to hit America and disrupt many of their lives.

•The main causes of the dust bowl were extreme drought for eight years in total, and also very poor farming techniques on the behalf of the inhabitants. Normally crops are rotated (different crops are grown in an area each year or sometimes no crops at all) so as to never deplete soil too much.

This was never done in the Dustbowl area, where the land was farmed to death leaving nothing to secure topsoil, creating this massive amount of dust to be blown huge distances by the wind. •The Dust Bowl brought ecological, economical and human misery to America during a time when it was already suffering under the Great Depression. While the economic decline caused by the Great Depression played a role, it was hardly the only guilty party. What circumstances conspired to cause the Dust Bowl? Economic depression coupled with extended drought, unusually high temperatures, poor agricultural practices and the resulting wind erosion all contributed to making the Dust Bowl.

The seeds of the Dust Bowl may have been sowed during the early 1920s. A post-World War I recession led farmers to try new mechanized farming techniques as a way to increase profits. Many bought plows and other farming equipment, and between 1925 and 1930 more than 5 million acres of previously unfarmed land was plowed [source: CSA]. With the help of mechanized farming, farmers produced record crops during the 1931 season. However, overproduction of wheat coupled with the Great Depression led to severely reduced market prices. The wheat market was flooded, and people were too poor to buy.

Farmers were unable to earn back their production costs and expanded their fields in an effort to turn a profit — they covered the prairie with wheat in place of the natural drought-resistant grasses and left any unused fields bare. But plow-based farming in this region cultivated an unexpected yield: the loss of fertile topsoil that literally blew away in the winds, leaving the land vulnerable to drought and inhospitable for growing crops. In a brutal twist of fate, the rains stopped. By 1932, 14 dust storms, known as black blizzards were reported, and in just one year, the number increased to nearly 40. •When settlers came to the area, they built farms and planted crops. Their crops replaced the natural grasses in the area, which had root systems more capable of sustaining life under the difficult conditions.

The Dust Bowl Essay

DBQ: What caused the Dust Bowl? Essay

DBQ: What caused the Dust Bowl? Essay.

In the 1930’s many people were devastated by vast dust storms. Many people suffered from them in Kansas, Colorado, New Mexico, Oklahoma, and Texas and some people even died. In the fiction book Out of the Dust, an Oklahoma girl named Billie Jo tells her story on how she survives the Dust Bowl with the loss of her mother. Billie Jo also describes the pain she is going through having her beloved piano destroyed by a dust storm. Lots of people think differently on how the Dust Bowl was caused but I believe it was caused by overproduction, lack of rainfall, and dust storms.

As technology evolved during the depression, more crops were being harvested. Farmers bought the newest equipment to gather crops more efficiently. This may sound more profitable, but it wasn’t, overproduction led to the prices of crops going down and down. In 1899, 50 million crops were harvested and in 1929, 150 million crops were harvested (doc D) due to the evolution of better farming equipment and less hard labor.

With over billions of acres of land taken up by crops, that leaves less space to irrigate the land and to allow moisture to enter the soil. Therefore, resulting in arid fields.

In the 1930‘s there was huge drought in the Great Plains. A decreased amount of precipitation was another main cause of the Dust Bowl. Without precipitation, it is very hard to grow crops. The Great Plains already has a semi-arid climate and without the much need rain, this area turned into a “bowl” of dust. The average precipitation according to John Wesley Powell is 20 inches of rain annually (doc E). As the years pass, the annual rainfall for Dallam County, Texas jumps around (doc E). Sometimes getting as low as 9.78 inches a year (doc E)! I think this problem was a result of the overproduction. You see, without enough space to let the water irrigate, there will be no way for the water to evaporate out of the ground to continue on with the water cycle. The outcome of this is that the soil becomes parched and it turns into dust.

Dust storms are high winds which carry clouds of dust, soil and sand over a large area. In the southern plains, many people suffered from diseases from these clouds of dust. In Nate White’s story of the Dust Bowl, he said that as soon as he walked outside, it was as if somebody had blindfolded him (doc A). He said he had bumped into telephone poles, skinned his shins on boxes and cans in the alleyway, and he fell on his knees and crawled to a dim house light (doc A) because the dust was so thick, he was unable to see.

These storms where so bad that many people thought it was the end of the world (doc A). These people thought the world was ending because the dust storms occurred year after year (doc A). During the storms, dust rattled against windows and fine powder caked peoples lips. The Dst Bowl got its name because many of the worst storms occured in the Great Plains area in Kansas, Colorado, New Mexico, and the panhandles of Texas and Oklahoma.

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DBQ: What caused the Dust Bowl? Essay

Too Big Too Fail Assignment Essay

Too Big Too Fail Assignment Essay.

The movie Too big to fail is about the economic crisis in 2008, where everyone can see how some decisions made affected the different people involved in the economy of the U.S. Throughout the movie there is an ethical dilemma that was always present. Paulson wanted to stop the crisis in any way no matter what they had to do even if they had pass over the law. In the movie, the case of Bear Stearns already passed and now the turn was for the Lehman Brothers Company.

In the case of Bear Stearns, Hank Paulson takes the decision to act and save the company. Fuld, Lehman Brothers CEO thought that the company was also going to be saved by the government, but this time Paulson didn’t want to do it because every CEO had to take responsibility of their actions. In this way he wants that everyone has an ethical behavior in the development of the economy.

Another dilemma can be seen in the negotiations of Lehman’s Brothers and the Koreans where Fuld didn’t want to sell the shares at a low price without thinking that this didn’t affected just him, but the entire market.

In this case doing the right thing people has to sacrifice something; Fuld didn’t think how big the problem for the rest of the economy was. Another big dilemma in this crisis was the fall of Fannie Mae and Freddie Mac. The Chinese and the Russians could collapse the U.S economy if Paulson didn’t take actions about Fannie Mae and Freddie Mac. That is why he decided to save the company and the government took control of it. This showed how Paulson contradicted himself of what he said about the case of Lehman Brothers. This was not the only thing that happened. Also AIG was in problems and Paulson decided to act making that Paulson lose credibility in some way, but did everything in his hands to save the economic crisis of 2008.

Henry Paulson and Ben Bernanke had to do something about the crisis. With Bernanke, Paulson decided to go to the congress and ask for $700 billion to save the economic system of the U.S. The congress decided that this was not possible, and they had to consider other options. Paulson decided to apply something of the bill passed by the congress. They had the option to inject capital to the most important institutions of the economic system of the U.S. Paulson didn’t agree with this idea because every time, as the CEO of Goldman Sachs, he fought against the inclusion of the government in these institutions. Against his personal beliefs, Paulson in some way ordered the financial institutions to accept the injection of capital to create confidence to the customers and in some way save the economy of the U.S.

For me this decision made by the U.S Department of Treasury and the Federal Reserve was the correct one for that “Second Great Depression” if all the financial institutions collapsed. Creating confidence in the customers and investors was something that they had to do to unfreeze the market. In the long run I think that the government will have to spend more and more money to solve the issues. This economic crisis will affect the entire world, and some first world countries have really a lot of problems. Maybe some emerging economies (like Latin American ones) would have another picture of the world and will be leading the world in the future. In this case I agree that Paulson and Bernanke took appropriate actions, even acting against Paulson’s personal beliefs, but thinking about the best solution for a country that was in risk of blowing out its entire economy. I agree that they decided to act and save the economy that is why I think they took the appropriate actions.

Too Big Too Fail Assignment Essay

Dystopian Short Stories About the Future Essay

Dystopian Short Stories About the Future Essay.

I don’t think I agree with the criticism that many of the critics of FDR’s New Deal that said that these programs were unnecessary and were in fact, a form of socialism and would lead down the road, eventually, to communism in the united states. I don’t agree with them because the New Deal was created to make the United States a more convenient country to Americans in need and was also made to help the U.S deal with poverty.

Poverty was a huge effect on the Americans because of the lack of employment, depression and like other things. Franklin D. Roosevelt’s New Deal was determined by three steps which was:

3R’s deficit spending

1. Relief-helping people get back on their feet.
2. Recovery-getting the economy back up
3. Reform-making sure it doesn’t happen again

The main cause of the New Deal was the stock market crash, or the great depression. There was a big increase in unemployment, lack of consumer buying, loss of homes.

All of this stock market crash affected not only the United States but also the world, because no one had money to buy things to raise the economy. 16 million people were unemployed. People were killing themselves, because they had no job and were depressed and what the president came up with is raise prices. Also not only did people lose their jobs, but lost money from banks that were closed down. Thousands of banks filed for bankruptcy and at that time there was no insurance that insured customer’s money.

So no matter how much you had in the bank, you lost it all, because the government took the money. This is why when election came and Franklin D. Roosevelt was up for president he was elected. He actually had a legit plan for Americans, so they wouldn’t be in what they were going through anymore and there would be happy families. This is what Americans wanted someone that wanted to help them and realize they were in need. That’s is why Franklin D. Roosevelt developed a plan he called the New Deal, which were a series of programs to help his fellow Americans. Although his plan was not easy to succeed, he still found a way to make it happen. He did all he can for his people to be happy and not live in this poverty they were living in.

Dystopian Short Stories About the Future Essay

The Philippine Neocolonialism Essay

The Philippine Neocolonialism Essay.

During The early 1930’s, the Great Depression varied substantially across countries. Back then, the U.S. was more severely devastated from World War II. Millions of Americans were jobless and at the same time there was Financial Crisis. Based on discussions, the U.S. used the Philippines as a source of Raw Materials for their Manufacture. By then the U.S. slowly relinquished and improved. During that era, the U.S. established the Tydings Mcduffie Law, as the access of the Philippines to have its dependence.

According to the Law, the Philippines are not to go to war without the permission of the U.S., unless it involves in protecting itself. Now, in case of economic context, the U.S. had already had Asian immigrants, which part of them are also Filipinos. The reason why the those Immigrant Filipinos settled there, unfortunately, is for low wages. They wanted to earn as much as they can too in a short period of time.

And since the Americans were financially devasted during that era, they blamed Filipinos for being part of their Financial Crisis because they were working to become rich once they get back to their homeland, and for the fact, since the ratio of women to men were small, that Filipino men also marry white women because of monetary context.

After then, the Tydings Mcduffie Law was established the U.S. to limit the immigrants of the country. When the Law was also implemented on 1934 in the Philippines, the country had a bound in the U.S. where they were not allowed to go to the U.S. In the Law, the Philippines were to be under self-governance after 10 years from the Establishment and at the same time the Americans would maintain Military Forces during the period given. During the period, foreign affairs in the Philippines were dealt by the Americans while Internal Affairs were to be only dealt by Filipinos.

2The Philippines was under various colonizers, but was mostly dominated by the U.S., mentally. Neocolonialism, by Merriam Webster’s definition, is the, “economic and political policies by which a great power indirectly maintains or extends its influence over other areas or people.” We were greatly influenced by the Americans during the time before we had our independence from them. Until now, most Filipinos are brain-washed, or more importantly, still have the colonial-mentality. Can I say that neocolonialism is a disruption to an independent nation? How can it disrupt such way? The Philippines was already a rich nation during the old era.

Due to various colonizations, the country became poorer and poorer. I’m not saying that I’m anti-democracy or something, but then what did the country learn in the end? Dependency. Yes, it is grateful to have foreign influence and have been introduced to better technology and economy, but can it improve us mentally? Neocolonialism is beneficial to our country because we need economic and financial help. We are open to foreign trades, as established in the Bell Trade Act. It helped improve our economy because we had labor, but were does the money go? Not wholly to our country.

We were enslaved for foreign industries, not local. It’s better to be labored in the local, in my opinion, because the local is more benefited. Until now, we support foreign products more than our local ones, leading our country poorer and poorer. Not only does neocolonialism affect us financially, but also mentally. We let our best or educated Filipinos work abroad. I’m actually glad that neocolonialism isn’t a trend in the modern era. If we let that kind of become a part of influencing us again, then how can we improve ourselves independently? What neocolonialism affected our country is also our discipline. We decreased our discipline and self-respect.

The Philippine Neocolonialism Essay

Relationship between George and Lennie Essay

Relationship between George and Lennie Essay.

Steinbeck shows ways in which the relationship between George and lennie work using many different techniques. Through this piece of writing I’m going to show you different ways he does this.

Steinbeck creates both characters George is small but very smart and a sensitive character where as lennie is tall and well built but has mental problems. These characters are extremely different but this creates love between them they are not related in anyway but anyone would think they were.

George treats lennie like his son all the way through the book quote “OK. Some day- we’re gunna get the jack together and we’re gunna have a little house and a couple of acres” this is George and lennies dream lennies main priority is to tender the rabbits not to have a house of his own with George this shows that lennie is very childish. Quote. “NO.. You tell it. It aint the same if I tell it.

Go on George how I get to tend the rabbits “. Lennie also repeats himself a lot this also shows his child like behavior. This behavior his something that is shown all the way through the book/film this is a big part in the relationship as it creates a lot of tension between both characters.

Companionship is another major part of the relationship George being the sensible clever one has to advise lennie on everything trying to keep him out of trouble like he had before in weed. George has to repeat things to lennie over and over again so he doesn’t forget or even make lennie repeat things he shouldn’t do. Quote. “ Hide in the brush said lennie. Hide in the brush said lennie slowly”. This shows that George doesn’t trust lennie just like a farther wouldn’t trust his son at a young age.

Control is another technique used by Steinbeck to create the relationship. George always makes sure lennie is under control and safe. At one part in the book George catches Lennie stroking a dead mouse. Quote. George-“awright, gi’ me that mouse!” Lennie-“ what mouse, George? I aint got no mouse.” Throughout this page George has to keep questioning Lennie and persuade him to put the mouse down. This once again shows lennies childlike behavior also this shows how determined he is to keep something he wants.

Another situation showing control in the relationship is where Lennie automatically walks behind George as if George Is Lennies leader like a man and a dog here I have referred Lennie to an animal, Steinbeck also did this in the book. Quote. “Drank with long gulps snorting into the water like a horse”.

In the great depression men usually travelled alone but George had to look after Lennie due to his disabilities George didn’t only have to look after his own belongings but Lennies too. Quote. Lennie- “ George … I aint got mine. I musta lost it. “ He looked down at the ground in despair. George- “you never had none, you crazy bastard I got both of’ em here. Think id let you carry your own work card?” Lennie doesn’t seem to regard his mental weakness instead he seems relieved that George is there to have his back its as if Lennie is in his own world.

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Relationship between George and Lennie Essay