The Great Depression

Production, credit, and international payments contained imbalances in the 1920s. Agricultural prices were weak, and some investments relied on fragile finance. The US market crash in 1929 became a visible turning point, followed by contraction and banking crises. Trade, loans, and the gold standard transmitted difficulties through falling demand and payments pressure. Factories reduced output, and raw-material exporters lost revenue across connected economies.

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Bank failures damaged savings and credit. Firms dismissed workers, and households relied on relief, relatives, and occasional employment. Farmers confronted low prices and debt, with drought adding hardship in parts of the United States. Homelessness, migration, and poverty appeared in reporting, photography, and literature. Falling consumption further reduced production. Wages, investment, and demand interacted, leaving those expecting rapid market recovery facing a prolonged period of unemployment.

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Governments adopted different responses, including leaving gold, public spending, protectionism, and stronger controls. The New Deal enlarged federal action, and Keynes developed explanations of demand and employment. Political radicalization also intersected with crisis. Recovery was uneven, and later wartime mobilization greatly expanded output. The depression prompted lasting debate over banking rules, public finance, labour protection, and state duties. Household experience of insecurity shaped expectations about the protections government should provide.

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