Ancient Greek And Roman Philosophy
Hippocrates, a Greek physician, suggested that depression was caused by four imbalanced body fluids called humours: yellow bile, black bile, phlegm, and blood. Specifically, he thought that melancholia was caused by too much black bile in the spleen. Hippocrates’ treatments of choice included bloodletting, baths, exercise, and diet.
A Roman philosopher and statesman named Cicero, in contrast, believed that melancholia had psychological causes such as rage, fear, and grief.;
In the last years before the common era, in spite of some steps toward believing in more physical and mental causes of depression, it was still a very common belief among even educated Romans that depression and other mental illnesses were caused by demons and by the anger of the gods.
The Controversial New Deal
Voted;into office in 1933, President Franklin Roosevelt promised massive change. The New Deal he initiated was an innovative, unprecedented series of domestic programs and acts designed to bolster American business, reduce unemployment, and protect the public.
Loosely based on Keynesian economics, its concept was that the government could and should stimulate the economy. The New Deal set lofty goals to create and maintain the national infrastructure, full employment, and healthy wages. The government set about achieving these goals through price, wage, and even production controls.
Some economists claim that Roosevelt continued many of Hoover’s interventions, just on a larger scale. He kept in place a rigid focus on price supports and minimum wages;and removed;the country from;the gold standard,;forbidding individuals to hoard gold coins and bullion. He banned monopolistic, some consider them competitive, business practices, and instituted dozens of new public works programs and other job-creation agencies.
The Roosevelt administration paid farmers and ranchers to stop or cut back on production. One of the most heartbreaking conundrums of the period was the destruction of excess crops, despite the need for thousands of Americans to access affordable food.
Timeline Of The Great Depression
The initial economic collapse which resulted in the Great Depression can be divided into two parts: 1929 to mid-1931, and then mid-1931 to 1933. The initial decline lasted from mid-1929 to mid-1931. During this time, most people believed that the decline was merely a bad recession, worse than the recessions that occurred in 1923 and 1927, but not as bad as the Depression of 1920-21. Economic forecasters throughout 1930 optimistically predicted an economic rebound come 1931, and felt vindicated by a stock market rally in the spring of 1930.
An increasing number of bank failures in late-1930 interrupted the process of credit creation and reduced the money supply, harming consumption. After a second round of banking panics in mid-1931, there was a major change in peoples expectations about the future of the economy. This fear of reduced future income coupled with the Feds deflationary monetary policy resulted in a deflationary spiral that cratered consumer spending, business investment, and industrial production. This further depressed the economy until Roosevelt stepped into office in 1933 and ended the gold standard, thereby ending the deflationary policy.
This article focuses on the economic milestones, with some mention of the political and social impact of the depression on nations and classes in a global context.
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What Caused The Great Depression
Throughout the 1920s, the U.S. economy expanded rapidly, and the nations total wealth more than doubled between 1920 and 1929, a period dubbed the Roaring Twenties.
The stock market, centered at the New York Stock Exchange on Wall Street in New York City, was the scene of reckless speculation, where everyone from millionaire tycoons to cooks and janitors poured their savings into stocks. As a result, the stock market underwent rapid expansion, reaching its peak in August 1929.
The American economy entered a mild recession during the summer of 1929, as consumer spending slowed and unsold goods began to pile up, which in turn slowed factory production. Nonetheless, stock prices continued to rise, and by the fall of that year had reached stratospheric levels that could not be justified by expected future earnings.
Adam To Windsor And More
On another section of this web site, you’ll see a reference to “Adam to Windsor”, and may wonder about the terminology. Both “Adam” and “Windsor” are patterns of Depression Glass. And there are a whole bunch of other patterns which range, alphabetically, in between these two. When a Depression Glass enthusiast refers to the whole field of DG patterns, they often say “Adam to Windsor”. This term refers to the machine-made DG patterns, as opposed to the “Elegant” patterns produced by the “hand-made” glassware companies. It is our intention to some day display photographs of at least one piece in each of the “Adam to Windsor” patterns on a series of educational web pages at this site. That is a project which is just beginning to take shape. We also intend to provide photographs of pieces in many of the more commonly collected “Elegant” patterns.
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American Economic Policy With Europe
As the Great Depression tightened its grip on the nation, the government was forced to act. Vowing to protect U.S. industry from overseas competitors, Congress passed the Tariff Act of 1930, better known as the;Smoot-Hawley Tariff. The measure imposed near-record tax rates on a wide range of imported goods. A number of American trading partners retaliated by imposing tariffs on U.S.-made goods. As a result, world trade fell by two-thirds between 1929 and 1934. By then, Franklin Roosevelt and a Democrat-controlled Congress passed new legislation allowing the president to negotiate significantly lower tariff rates with other nations.
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, though it did help in reducing unemployment.
The rearmament policies leading up to World War II helped stimulate the economies of Europe in 19371939. By 1937, unemployment in Britain had fallen to 1.5;million. The mobilization of manpower following the outbreak of war in 1939 ended unemployment.
When the United States entered the war in 1941, it finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%. In the US, 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.
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Effects Of The Great Depression
The Great Depression occurred between 1929 and 1939.; The worst years were 1932 and 1933, and after that things slowly started to improve, but it would take years until the Depression finally came to a complete end.
The effects of The Great Depression were severe.; Unemployment was at an all time high with more people losing their jobs everyday. Businesses closed. Banks were going bankrupt which meant even people who were thrifty and wise with their money lost their savings they had put in the bank they trusted.; People were evicted from their homes and were literally starving.
Even farmers who were growing their own food suffered in some areas due to drought.; The drought was so severe that it caused major dust storms that destroyed crops and killed livestock.; The severe dry period that triggered the dust storms was named The Dust Bowl.
Its hard to imagine all these people went through.; I look at my kids and I try to picture what it would be like to not know how I was going to feed them.; I dont know what I would do, but I can tell you that it would take everything within me not to absolutely fall apart.
The Stock Market Crash
During the short depression;that lasted from;1920 to 1921,;known as the Forgotten Depression, the U.S. stock market fell by nearly 50%, and corporate profits declined over 90%. However, the U.S. economy enjoyed robust growth during the rest of the decade. The Roaring Twenties, as the era came to be known, was a period when the American public discovered the stock market and dove in head first.
Speculative frenzies affected both the real estate markets and the New York Stock Exchange .;Loose money supply;and high levels of by investors helped;to fuel;an unprecedented increase;in asset prices. The lead-up to October 1929 saw equity prices rise to all-time high multiples of more than 30-times earnings, and the benchmark Dow Jones Industrial Average increased;500% in just five years. The combination of these factors would ultimately cause the stock market crash.
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Reduction In Purchasing Across The Board
With people’s investments worthless, their savings diminished or depleted, and credit tight to nonexistent, spending by consumers and companies alike ground to a standstill. As a result, workers were laid off en masse. In a chain reaction, as people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans; repossessions and evictions were commonplace. More and more unsold inventory began to accumulate. The unemployment rate rose above 25%, which meant even less spending to help alleviate the economic situation.
The Impact Of World War Ii
According to the gross domestic product and employment figures only, the Great Depression appeared to end suddenly around 1941 to 1942, just as the United States entered World War II. The unemployment rate fell from 8 million in 1940 to under 1 million in 1943. However, more than 16.2 million Americans were conscripted to fight in the Armed Services. In the private sector, the real unemployment rate grew during the war.
Due to wartime shortages caused by rationing, the standard of living declined, and taxes rose dramatically to fund the war effort. Private investment dropped from $17.9 billion in 1940 to $5.7 billion in 1943, and total private sector production fell by nearly 50%.
Although the notion that the war;ended the Great Depression is a broken window fallacy, the conflict did put;the United States on the road to recovery. The war;opened international trading channels and reversed price and wage controls. Suddenly, there was;government demand for inexpensive products, and the;demand created a massive fiscal stimulus.
When the war ended, the trade routes remained open. In the first 12 months afterward, private investments rose from $10.6 billion to $30.6 billion. The stock market broke into a bull run in a few short years.
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Uneven Burden On The Country
Several key factors aggravated the Depressions effects in Canada. Different regions of the country were impacted to different degrees. The countrys social-welfare structure proved woefully inadequate. And government attempts to address problems throughpolicy proved misguided.
A third of Canadas Gross National Income came from exports. Therefore, the country was hit hard by the collapsein international trade. The four western provinces depended almost exclusively on primary-product exports. They were therefore the most seriously affected.
The economic problems were made worse on the Prairies by years of drought. Plagues of grasshoppers andhailstorms also caused huge crop failures. Saskatchewan experienced the lowest price for wheatin recorded history. The provinces income plummet by 90 per cent within two years. Sixty-six per cent of the rural population was forced onto relief. The other western provinces were technically bankruptfrom 1932 onwards.
Ontario and Quebec also experienced heavy unemployment.However, they were less affected because of their more diversified industrial economies. Both provinces produced goods and services for the protected domestic market. The had already entered into severe economic decline in the 1920s and had less distance to fall.
Great Depression Ends And World War Ii Begins
With Roosevelts decision to support Britain and France in the struggle against Germany and the other Axis Powers, defense manufacturing geared up, producing more and more private sector jobs.
The Japanese attack on Pearl Harbor in December 1941 led to Americas entry into World War II, and the nations factories went back in full production mode.
This expanding industrial production, as well as widespread conscription beginning in 1942, reduced the unemployment rate to below its pre-Depression level. The Great Depression had ended at last, and the United States turned its attention to the global conflict of World War II.
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Events Leading Up To The Great Depression
The Great Depression was a worldwide economic downturn that began in the fall of 1929 and did not end in many places until the Second World War. It was triggered in large part by a sudden crash of the American stock market on October 29, a day widely known as Black Tuesday. In Newfoundland and Labrador, a number of factors contributed to the country’s financial troubles. Spending during the First World War had resulted in a large national debt, as did the costs of maintaining the Newfoundland Railway. The government also borrowed heavily throughout the 1920s to meet its expenses and a post-war slump in world trade further exacerbated the situation. The crisis deepened following the Depression, forcing the country to almost default on its public debt payments in 1931 and to ultimately abandon self-government in 1934.
The New Deal: A Road To Recovery
Among the programs and institutions of the New Deal that aided in recovery from the Great Depression were the Tennessee Valley Authority , which built dams and hydroelectric projects to control flooding and provide electric power to the impoverished Tennessee Valley region, and the Works Progress Administration , a permanent jobs program that employed 8.5 million people from 1935 to 1943.
When the Great Depression began, the United States was the only industrialized country in the world without some form of unemployment insurance or social security. In 1935, Congress passed the Social Security Act, which for the first time provided Americans with unemployment, disability and pensions for old age.
After showing early signs of recovery beginning in the spring of 1933, the economy continued to improve throughout the next three years, during which real GDP grew at an average rate of 9 percent per year.
A sharp recession hit in 1937, caused in part by the Federal Reserves decision to increase its requirements for money in reserve. Though the economy began improving again in 1938, this second severe contraction reversed many of the gains in production and employment and prolonged the effects of the Great Depression through the end of the decade.
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What Was The Great Depression
The Great Depression, which began in the United States in 1929 and spread worldwide, was the longest and most severe economic downturn in modern history. It was marked by steep declines in industrial production and in prices , mass unemployment, banking panics, and sharp increases in rates of poverty and homelessness.
Correlations And Regression Models
shows correlations between annual improvements in healthas assessed by gains in life expectancy or reductions in age-specific mortality ratesand annual changes in economic conditions. Improvements in health are negatively correlated with GDP growth and positively correlated with increases in the unemployment rate . Patterns were consistent across race, sex, and age groups .
Correlations of the annual improvement in health, measured either by the annual increase in life expectancy at birth or by the annual percentage decrease in age-specific mortalitywith economic conditionsmeasured by the annual GDP growth or the change in the unemployment rate in the United States, 19201940
Overall life expectancy increased 8.8 years over the period 19201940, i.e., on average the annual gain was 0.4 years. shows the mean difference in the annual gain in life expectancy associated with a GDP increase of 1 percentage point in the same year and in the 3 prior years. The negative coefficients for lag zero indicate that years of larger GDP growth are also years of smaller gains in life expectancy. None of the coefficients for lagged GDP change are large or statistically significant. The model for the whole population including only GDP growth at lag zero indicates that a percentage point increase in GDP growth is associated with a reduction in the annual gain in life expectancy of 0.20 years .
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Turning Point And Recovery
In most countries of the world, recovery from the Great Depression began in 1933. In the U.S., recovery began in early 1933, but the U.S. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933.
There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years . The common view among most economists is that Roosevelt’s New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession. Some economists have also called attention to the positive effects from expectations of reflation and rising nominal interest rates that Roosevelt’s words and actions portended. It was the rollback of those same reflationary policies that led to the interruption of a recession beginning in late 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 trend in 1938.