Introduction
The depression following 1929 was world wide. The United States made contribution to the causes as to the course of the disturbance, which in turn reacted in every part upon this country. What happened in America becomes clearer on looking at the picture of continents in distress. This will serve to put the experiences in America in perspective. Incidentally, it will appear that a number of devices commonly regarded as American improvisations were adaptations of policies used elsewhere.
Economic processes are continuous. The period from World War I to World War II was integral. We are apt to think of the two decades from Versailles to Warsaw as distinct, broken at the stock market crash of 1929. But American ebullience of the "New Economic Era," 1921 -1929, had no counterpart in Europe.There the effort until about 1925 was to restore war losses; when this was more or less achieved, the next four years went into tenuous and doomed attempts to maintain the newly established equilibrium. However, even in America the two dreams, good and bad, as pronounced by Joseph, were one.
The tragedy was made more poignant by moments of seeming alleviation or even of improvement. Such were the subsidence of inflation, England's return to the gold standard, progressive forgiveness of reparations, free flow of loans from victors to vanquished, and a last trial at restoration in the fated World Economic Conference. Each time the dawn was false.
The easy-money policy of the Federal Reserve System after 1925, intended to turn back the flow of gold from Europe to the United States, was mainly responsible for the speculative rise in the stock market. The collapse of that market in October, 1929, is ordinarily taken as the beginning of the world depression.......
