Chapter 531： The Great Depression is Coming

With the collapse of the stock market, the U.S. economy immediately plunged into a devastating disaster, and a terrible chain reaction soon occurred.

Because of the losses, many families poured into banks to withdraw their deposits, and the withdrawal of large amounts of deposits made many small banks unsupportable. Because they also suffered heavy losses in this stock market decline, many small banks were surrounded by withdrawals because they could not give these depositors money. So bankruptcy happened under such circumstances, and this caused more people to flood into the bank to withdraw the actual hard-earned money. So a larger wave of runs broke out.

While the bank was forced by depositors to find the loan company immediately and demanded to recover the loan, the company that also suffered heavy losses was unable to pay the bank. The reason is the same, they have no money either. This is like a cycle. Depositors run on banks, banks force companies to pay back money, corporate bankruptcies allow more people to run on banks, banks force more companies to repay, and more people lose their jobs.

During this period, the unemployed army in the United States reached 8.3 million, accounting for almost 9% of the total population of the United States. In cities in the United States, the poor lined up to receive food for several blocks.

Don't forget that there are family members waiting to live behind it. This is equivalent to one-quarter to one-third of all households in the United States who have lost their source of income. This has caused 2 to 4 million middle school students to drop out of school halfway through. Many people cannot bear the physical and psychological pain and commit suicide; social security is deteriorating day by day.

At this time, it is no longer an economic problem, but a social problem.

The U.S. amplitude is helpless, because at this time they still believe that the market will automatically adjust. The difficulties at this time are only short-lived, and the US economy will continue to grow in the future.

In fact, the difficulties of the United States have only just begun. According to later statistics, the U.S. economy has been declining year by year since 1929. Until the low point of 1933, the US gross national product was cut by almost half, and the national economy reached a point where there was no confidence in it.

According to the estimate of Fortune magazine in September 1932, there are 34 million adult men, women and children in the United States without any income, which is close to 28% of the total population. And this research report, like other reports, does not include the 11 million rural households suffering in another hell.

There are many legends about job hunting around 1932, some of them sound bizarre, but they are not fake at all.

Someone did stay at the door of the Detroit employment agency all night. There was indeed an Arkansas man who walked 900 miles to find a job.

An employment agency on 6th Street in Manhattan recruited 300 people, and there were indeed 5,000 applicants.

Someone from Washington State went to the woods to set fires so they could hire him as a firefighter.

In such an era of economic depression, more than 15 million people were looking for work everywhere, but there was no job to do anywhere. "Business Week" conducted a survey and confirmed that many people no longer like the United States, some have already left the United States, and some are trying to leave. In the early 1930s, the number of people who moved abroad exceeded that of people who moved in every year.

And many people were attracted by the Soviet Union and immigrated to the Soviet Union.

So how did the poor in the United States spend this time?

The man’s shaving blade is sharpened and used again; roll paper cigarettes by himself, or smoke the “wing” card (a pack of dime). To save power, use 25-watt bulbs instead. The children picked up the soda bottles and went to the shop to refund the money. They went to the bakery and lined up to buy the bread in Gesu. The women cut the old sheets and sewed the two sides together, so that the worn parts in the middle were moved to the two sides.

Change your clothes to your daughter so that you don’t look shabby in front of your neighbor’s wife. In fact, the neighbor’s hands are as tight as you can, so I’m afraid the same method is adopted. Many people save the cards they received to congratulate Christmas and send them to other friends next year.

In the countryside, especially the farmers in the central and western regions, life is extremely bleak. A large number of farmers went bankrupt due to the collapse in agricultural prices Millions of people are saved from death only because they live like beasts. Country folks in Pennsylvania eat weed roots and dandelions. The people of Kentucky eat violet leaves, wild onions, forget-me-nots, wild lettuce, and weeds that have always been eaten exclusively for livestock. The mothers of the children in the city wandered on the dock and waited. When rotten fruits and vegetables were thrown out, they went up to compete with wild dogs. Vegetables are loaded into the truck from the dock, and they ran behind, picking up anything that fell.

The chef of a hotel in the Midwest put a bucket of leftovers in the alley outside the kitchen, and immediately a dozen people rushed out of the darkness to grab it. People have also seen that a whole family walked into the garbage dump to pick up bones and watermelon peels. Because there are so many maggots, there is a widow in Chicago who always takes off her glasses when picking up something to eat.

Since the American people are living so badly, what about the European side?

First of all, Britain and France, which played a leading role in Europe, also suffered heavy losses. At this time, Britain's traditional heavy industry was also declining. In 1921, the unemployment rate in Britain reached nearly 17%. Throughout the 1920s, the unemployed population in the UK remained at around one million.

The Great Depression naturally added fuel to the fire. When Britain’s foreign trade was cut by 23%, a large number of banks went bankrupt, businesses closed down, and workers were unemployed. The measures taken by the Labor Government during this period were also standard classical liberalism. The result of these measures is either unemployment or wage cuts. Of course, they cannot save the British economy. Fortunately, Britain still has colonies that can dump products, but it also makes Britain unable to deal with European affairs. First of all, he needs to save himself.

On the French side, it was not directly hit by the Great Depression until 1931, but within two years, French industrial production fell by 26%. The French economy was in crisis throughout the 1930s, and it was not until June 1939 that French industrial production returned to the level of 1931. It was not until 1950 after World War II that French industry recovered to the level of 1929.

If Britain and France still have a chance to breathe, Germany is the worst.

Since 1924 through the Dawes Plan and the Young Plan, Weimar's German economy temporarily stabilized. However, it was precisely because of Germany's "economic rationalization" following the United States during this period that the working conditions of German workers were deteriorating and the unemployment rate was also rising.

It is precisely because of the effects of these two plans that the Weimar economy's dependence on the United States is particularly profound. As of 1928, U.S. investment in Weimar Germany was as high as 4 billion U.S. dollars, while the total U.S. investment in Europe at that time was 8 billion U.S. dollars.

The Great Depression hit Weimar's economy particularly severely. Germany’s industrial output fell sharply, and laborers were naturally in danger. By the beginning of 1932, Germany’s official unemployment rate was as high as one-third, or 6 million laborers. This figure has not been counted as 2 million “unofficial”. Unemployed.

As for other European countries, they suffered huge losses during the Great Depression. Bank bankruptcies, business shutdowns, and people's unemployment also afflicted governments of all countries. The Great Depression also caused the ideological division of the European people. Left-wing and right-wing parties have attracted a lot of attention. They urgently need a government to help them get out of the predicament.

As for Romania, which belongs to Europe, it is naturally unavoidable, and it is also affected by the Great Depression.