History of Economic Depressions

Oct. 29, 1929

1940’s

Information & Solutions Past & Present

Depression Soup 2009 ?

doesn't have a long list of ingredients . Start with a clean 55 gallon drum. Add 50 gallons of water. Several ham hocks or a diced pork roll, one large onion, 2 pounds Collard greens, one whole box elbow macaroni. Place drum on concrete blocks & heat with wood from below. Simmer for one hour, serve

“A Place to Unwind”

“A man is wise with the wisdom of his time only, and ignorant with its ignorance”.

Henry David Thoreau

There are not many cases of economic collapse in modern history and in most cases the economies made a slow but eventual recovery. Interestingly, the advent of crisis has been traced to imbalances in the financial systems which broke down and paralyzed the real economy. Only after purging out bad debts and driving asset prices to lows, with employment levels and wages severely reduced, have the economies begun a painful and long standing process of recovery.

The Great Depression: 1928-1937

There were multiple causes for the first downturn in 1929, including the structural weaknesses and specific events that turned it into a major depression and the way in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like massive bank failures and the stock market crash, while economists (such as Peter Temin and Barry Eichengreen) point to Britain's decision to return to the Gold Standard at pre-World War I parities (US$4.86:£1).

The Long Depression: 1873 to 1896

The causes of the Depression are debated, mainly because it was not a production depression; it was only a price depression. The primary cause of the price depression was the tight monetary policy that the U.S. followed to get back to the gold standard after the Civil War. The U.S. was taking money out of circulation to achieve this goal, therefore, there was less available money to facilitate trade.

Historic Panics, Depressions and Economic Crises

It is now commonly used to describe a state of fear bordering on frenzy, from whatever cause induced. In history, great commercial crisis are spoken of as “Panics”. The US has passed through several notable ones.

Those most disastrous have usually followed general injudicious speculation in lands or inflated securities. The crisis of 1816-1819 in the United States, it is claimed was due to the speculation and disorder following the War of 1812. The next occurred in 1825. A very memorable panic was that of 1837.

The few years preceding had been marked by extraordinary speculation, carried on with an unsound banking system. Jackson's "specie circular" caused many banks to suspend, and credit was generally impaired throughout the country. Governmental aid was invoked by many financial institutions, but without avail, as Van Buren, who had succeeded to the Presidency, insisted upon individuals righting their own affairs. In 1857 another period of inflation was followed by another panic. Again in 1873 there was a severe monetary crisis. Just 20 years later occurred the last panic from which the country has suffered. (See also Black Friday).

13 million people became unemployed.

Industrial production fell by nearly 45% between the years 1929 and 1932.

Home-building dropped by 80% between the years 1929 and 1932.

From the years 1929 to 1932, about 5,000 banks went out of business.

By 1933, 11,000 of the US' 25,000 banks had failed.

In 1933, 25% of all workers and 37% of all nonfarm workers were unemployed.

Between 1929 and 1932 the income of the average American family was reduced by 40%.

Facts about the Great Depression

History - Cases of Economic Collapse

Economic Depression

Massive collapse of the economy that normally follows a period of prosperity. A depression is usually accompanied by a financial panic or a crash of the stock market as investors lose confidence and refuse to buy stocks or make loans. A staggering level of unemployment is the most immediate and debilitating result. Not all crashes reach the level of national depression, however. If the down turn in the economy is short lived and relatively mild, it is called a "recession." Three major depressions, so defined because of the depth and duration of the collapse have occurred in American history: 1837, 1893, and 1929. Some historians add to the list the downturns in 1857, 1873, and 1907. There is a lot of dispute among economic historians and economists as to the causes of economic depressions.