On May 2, 4:35Â*pm, ПеаБраин wrote:


snicker, amity shales, snicker.


here is what really happened before and during the great depression,
and hayek, freidman, rand, greenspan, or any other revisionists seem
not to be able to lie away,

http://www.aliveness.com/kangaroo/Timeline.htm


TIMELINES OF THE GREAT DEPRESSION: 

This page features two timelines:
the first for general events of the Roaring 20s and the Great
Depression, the second for leading economic indicators.

The
importance of these timelines cannot be emphasized enough. Seeing the
order in which events actually occurred dispels many myths about the
Great Depression. One of the greatest of these myths is that
government intervention was responsible for its onset. Truly massive
intervention began only under the presidency of Franklin Roosevelt in
1933, who was sworn in after the worst had already hit. Although his
New Deal did not cure it, all the leading economic indicators improved
on his watch. 

But don't take my word for it -- here is the raw
data: 

TIMELINE OF GENERAL EVENTS 

1920s (Decade)
• During World War I, federal spending grows three times larger than
tax collections. When the government cuts back spending to balance the
budget in 1920, a severe recession results. However, the war economy
invested heavily in the manufacturing sector, and the next decade will
see an explosion of productivity... although only for certain sectors
of the economy.
• An average of 600 banks fail each year.
• Agricultural, energy and coal mining sectors are continually
depressed. Textiles, shoes, shipbuilding and railroads continually
decline.
• The value of farmland falls 30 to 40 percent between 1920 and 1929.
• Organized labor declines throughout the decade. The United Mine
Workers Union will see its membership fall from 500,000 in 1920 to
75,000 in 1928. The American Federation of Labor would fall from 5.1
million in 1920 to 3.4 million in 1929.
• "Technological unemployment" enters the nation's vocabulary; as
many as 200,000 workers a year are replaced by automatic or semi-
automatic machinery.
• Over the decade, about 1,200 mergers will swallow up more than
6,000 previously independent companies; by 1929, only 200 corporations
will control over half of all American industry.
• By the end of the decade, the bottom 80 percent of all income-
earners will be removed from the tax rolls completely. Taxes on the
rich will fall throughout the decade.
• By 1929, the richest 1 percent will own 40 percent of the nation's
wealth. The bottom 93 percent will have experienced a 4 percent drop
in real disposable per-capita income between 1923 and 1929.
• The middle class comprises only 15 to 20 percent of all Americans.
• Individual worker productivity rises an astonishing 43 percent from
1919 to 1929. But the rewards are being funneled to the top: the
number of people reporting half-million dollar incomes grows from 156
to 1,489 between 1920 and 1929, a phenomenal rise compared to other
decades. But that is still less than 1 percent of all income-earners.
1922
• The conservative Supreme Court strikes down federal child labor
legislation.
1923
• President Warren Harding dies in office; his administration was
easily one of the most corrupt in American history. Calvin Coolidge,
who is squeaky clean by comparison, becomes president. Coolidge is no
less committed to laissez-faire and a non-interventionist government.
He announces to the American people: "The business of America is
business."
• Supreme Court nullifies minimum wage for women in District of
Columbia.
1924
• The Ku Klux Klan reaches the height of its influence in America: by
the end of the year it will claim 9 million members. It will decline
drastically in 1925, however, after financial and moral scandals rock
its leadership.
• The stock market begins its spectacular rise. Bears little relation
to the rest of the economy.
1925
• The top tax rate is lowered to 25 percent - the lowest top rate in
the eight decades since World War I.
• Supreme Court rules that trade organizations do not violate anti-
trust laws as long as some competition survives.
1928
• The construction boom is over.
• Farmers' share of the national income has dropped from 15 to 9
percent since 1920.
• Between May 1928 and September 1929, the average prices of stocks
will rise 40 percent. Trading will mushroom from 2-3 million shares
per day to over 5 million. The boom is largely artificial.
1929
• Herbert Hoover becomes President. Hoover is a staunch individualist
but not as committed to laissez-faire ideology as Coolidge.
• More than half of all Americans are living below a minimum
subsistence level.
• Annual per-capita income is $750; for farm people, it is only $273.
• Backlog of business inventories grows three times larger than the
year before. Public consumption markedly down.
• Freight carloads and manufacturing fall.
• Automobile sales decline by a third in the nine months before the
crash.
• Construction down $2 billion since 1926.
• Recession begins in August, two months before the stock market
crash. During this two month period, production will decline at an
annual rate of 20 percent, wholesale prices at 7.5 percent, and
personal income at 5 percent.
• Stock market crash begins October 24. Investors call October 29
"Black Tuesday." Losses for the month will total $16 billion, an
astronomical sum in those days.
• Congress passes Agricultural Marketing Act to support farmers until
they can get back on their feet.
1930
• By February, the Federal Reserve has cut the prime interest rate
from 6 to 4 percent. Expands the money supply with a major purchase of
U.S. securities. However, for the next year and a half, the Fed will
add very little money to the shrinking economy. (At no time will it
actually pull money out of the system.) Treasury Secretary Andrew
Mellon announces that the Fed will stand by as the market works itself
out: "Liquidate labor, liquidate stocks, liquidate real estate… values
will be adjusted, and enterprising people will pick up the wreck from
less-competent people." (More)
• The Smoot-Hawley Tariff passes on June 17. With imports forming
only 6 percent of the GNP, the 40 percent tariffs work out to an
effective tax of only 2.4 percent per citizen. Even this is
compensated for by the fact that American businesses are no longer
investing in Europe, but keeping their money stateside. The consensus
of modern economists is that the tariff made only a minor contribution
to the Great Depression in the U.S., but a major one in Europe. (More)
• The first bank panic occurs later this year; a public run on banks
results in a wave of bankruptcies. Bank failures and deposit losses
are responsible for the contracting money supply.
• Supreme Court rules that the monopoly U.S. Steel does not violate
anti-trust laws as long as competition exists, no matter how
negligible.
• Democrats gain in Congressional elections, but still do not have a
majority.
• The GNP falls 9.4 percent from the year before. The unemployment
rate climbs from 3.2 to 8.7 percent.
1931
• No major legislation is passed addressing the Depression.
• A second banking panic occurs in the spring.
• The GNP falls another 8.5 percent; unemployment rises to 15.9
percent.
1932
• This and the next year are the worst years of the Great Depression.
For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6
percent.
• Industrial stocks have lost 80 percent of their value since 1930..
• 10,000 banks have failed since 1929, or 40 percent of the 1929
total.
• About $2 billion in deposits have been lost since 1929.
• Money supply has contracted 31 percent since 1929.
• GNP has also fallen 31 percent since 1929.
• Over 13 million Americans have lost their jobs since 1929.
• Capital growth investments have dropped from $16.2 billion to 1/3
of one billion since 1929.
• Farm prices have fallen 53 percent since 1929.
• International trade has fallen by two-thirds since 1929.
• The Fed makes its first major expansion of the money supply since
February 1930.
• Congress creates the Reconstruction Finance Corporation. (More)
• Congress passes the Federal Home Loan Bank Act and the Glass-
Steagall Act of 1932. (More)
• Top tax rate is raised from 25 to 63 percent.
• Popular opinion considers Hoover's measures too little too late.
Franklin Roosevelt easily defeats Hoover in the fall election.
Democrats win control of Congress.
• At his Democratic presidential nomination, Roosevelt says: "I
pledge you, I pledge myself, to a new deal for the American people."
1933
• Roosevelt inaugurated; begins "First 100 Days" of intensive
legislative activity. (More)
• A third banking panic occurs in March. Roosevelt declares a Bank
Holiday; closes financial institutions to stop a run on banks.
• Alarmed by Roosevelt's plan to redistribute wealth from the rich to
the poor, a group of millionaire businessmen, led by the Du Pont and
J.P. Morgan empires, plans to overthrow Roosevelt with a military coup
and install a fascist government. The businessmen try to recruit
General Smedley Butler, promising him an army of 500,000, unlimited
financial backing and generous media spin control. The plot is foiled
when Butler reports it to Congress. (More)
• Congress authorizes creation of the Agricultural Adjustment
Administration, the Civilian Conservation Corps, the Farm Credit
Administration, the Federal Deposit Insurance Corporation, the Federal
Emergency Relief Administration, the National Recovery Administration,
the Public Works Administration and the Tennessee Valley Authority.
(More)
• Congress passes the Emergency Banking Bill, the Glass-Steagall Act
of 1933, the Farm Credit Act, the National Industrial Recovery Act and
the Truth-in-Securities Act. (More)
• U.S. goes off the gold standard.
• Roosevelt does much to redistribute wealth from the rich to the
poor, but is obsessed with a balanced budget. He later rejects Keynes'
advice to begin heavy deficit spending.
• The free fall of the GNP is significantly slowed; it dips only 2..1
percent this year. Unemployment rises slightly, to 24.9 percent.
1934
• Congress authorizes creation of the Federal Communications
Commission, the National Mediation Board and the Securities and
Exchange Commission. (More)
• Congress passes the Securities and Exchange Act and the Trade
Agreement Act. (More)
• The economy turns around: GNP rises 7.7 percent, and unemployment
falls to 21.7 percent. A long road to recovery begins.
• Sweden becomes the first nation to recover fully from the Great
Depression. It has followed a policy of Keynesian deficit spending.
(More)
1935
• The Supreme Court declares the National Recovery Administration to
be unconstitutional.
• Congress authorizes creation of the Works Progress Administration,
the National Labor Relations Board and the Rural Electrification
Administration. (More)
• Congress passes the Banking Act of 1935, the Emergency Relief
Appropriation Act, the National Labor Relations Act, and the Social
Security Act. (More)
• Economic recovery continues: the GNP grows another 8.1 percent, and
unemployment falls to 20.1 percent.
1936
• The Supreme Court declares part of the Agricultural Adjustment Act
to be unconstitutional.
• In response, Congress passes the Soil Conservation and Domestic
Allotment Act. (More)
• Top tax rate raised to 79 percent.
• Economic recovery continues: GNP grows a record 14.1 percent;
unemployment falls to 16.9 percent.
• Germany becomes the second nation to recover fully from the Great
Depression, through heavy deficit spending in preparation for war.
1937
• The Supreme Court declares the National Labor Relations Board to be
unconstitutional.
• Roosevelt seeks to enlarge and therefore liberalize the Supreme
Court. This attempt not only fails, but outrages the public.
• Economists attribute economic growth so far to heavy government
spending that is somewhat deficit. Roosevelt, however, fears an
unbalanced budget and cuts spending for 1937. That summer, the nation
plunges into another recession. Despite this, the yearly GNP rises 5.0
percent, and unemployment falls to 14.3 percent.
1938
• Congress passes the Agricultural Adjustment Act of 1938 and the
Fair Labor Standards Act. (More)
• No major New Deal legislation is passed after this date, due to
Roosevelt's weakened political power.
• The year-long recession makes itself felt: the GNP falls 4.5
percent, and unemployment rises to 19.0 percent.
• Britain becomes the third nation to recover as it begins deficit
spending in preparation for war.
1939
• GNP rises 7.9 percent; unemployment falls to 17.2 percent.
• The United States will begin emerging from the Depression as it
borrows and spends $1 billion to build its armed forces. From 1939 to
1941, when the Japanese attack Pearl Harbor, U.S. manufacturing will
have shot up a phenomenal 50 percent!
• The Depression is ending worldwide as nations prepare for the
coming hostilities.
• World War II starts with Hitler's invasion of Poland.
1945
• Although the war is the largest tragedy in human history, the
United States emerges as the world's only economic superpower. Deficit
spending has resulted in a national debt 123 percent the size of the
GDP. By contrast, in 1994, the $4.7 trillion national debt will be
only 70 percent of the GDP!
• The top tax rate is 91 percent. It will stay at least 88 percent
until 1963, when it is lowered to 70 percent. During this time,
America will experience the greatest economic boom it has ever known.
ECONOMIC TIMELINE

The following timeline shows the order of economic events during the
Great Depression. Notice the effect that deficit spending had on
economic growth:

Receipts: Tax receipts as a percentage of the Gross Domestic Product

Spending: Federal spending as a percentage of the Gross Domestic
Product

GNP: Percent change in the Gross National Product

Unemp.: Unemployment rate

Tax Federal GNP Unemp.
Year Receipts Spending Growth Rate
-------------------------------------------------
1929 -- -- -- 3.2% Hoover era, Great
Depression begins
1930 4.2% 3.4% - 9.4% 8.7
1931 3.7 4.3 - 8.5 15.9
1932 2.9 7.0 -13.4 23.6
1933 3.5 8.1 - 2.1 24.9 FDR, New Deal begins;
contraction ends March
1934 4.9 10.8 + 7.7 21.7
1935 5.3 9.3 + 8.1 20.1
1936 5.1 10.6 +14.1 16.9
1937 6.2 8.7 + 5.0 14.3 recession begins, May
1938 7.7 7.8 - 4.5 19.0 recession ends, June
1939 7.2 10.4 + 7.9 17.2
1940 6.9 9.9
1941 7.7 12.1
1942 10.3 24.8
1943 13.7 44.8
1944 21.7 45.3
1945 21.3 43.7
As you can see, Roosevelt began relatively modest deficit spending
that arrested the slide of the economy and resulted in some
astonishing growth numbers. (Roosevelt's average growth of 5.2 percent
during the Great Depression is even higher than Reagan's 3.7 percent
growth during his so-called "Seven Fat Years!") When 1936 saw a
phenomenal record of 14 percent growth, Roosevelt eased back on the
deficit spending, overly worried about balancing the budget. But this
only caused the economy to slip back into a recession, as the above
chart shows.

I have been unable to find reliable economic growth
figures from World War II, but as a generalization it is safe to say
the economy exploded, experiencing it’s greatest growth in U.S.
history. Between 1940 and 1945, the GDP nearly doubled in size, from
$832 billion to $1,559 billion in constant 87 dollars. And this
occurred as deficit spending soared, to levels Keynes had earlier and
unsuccessfully recommended to Roosevelt.

Next Section: Summary
Return
to The Great Depression Homepage

Sources:

T.H. Watkins, The Great
Depression: America in the 1930s (New York: Little, Brown and Company,
1993)

Kevin Phillips, Boiling Point (New York: HarperCollins, 1993)
Kevin Phillips, The Politics of Rich and Poor (New York: Random House,
1990)

The 1995 Grolier Encyclopedia (Entries: New Deal, Depression of
the 30s, Roosevelt, Coolidge.)

The Encyclopedia Brittanica Online
(Entries: New Deal, Great Depression.)

Donald Barlett and James
Steele, America: What Went Wrong? (Kansas City: Andrews and McMeel,
1992)

Donald Barlett and James Steele, America: Who Really Pays the
Taxes? (New York: Simon & Schuster, 1994)

James MacGregor Fox,
Roosevelt: The Lion and the Fox (New York: Konecky and Konecky, 1956)
Elaine Schwartz, Econ 101½ (New York: Avon Books, 1995)

Peter Pugh
and Chris Garratt, Introducing Keynes (Cambridge, England: Icon Books,
Ltd., 1993)

Paul Krugman, Peddling Prosperity (New York: W..W. Norton
and Company, 1994)

Online sources:

History lecture notes:
http://www.marshall.edu/history/mcca...ure/greatdep.1
Gary H. Stern (President, Federal Reserve Bank of Minneapolis),
"Achieving Economic Stability: Lessons From the Crash of 1929," 1987
Annual Report Essay, http://woodrow.mpls.frb.fed.us/pubs/ar/ar1987.html
Office of Management and Budget, Budget of the United States
Government, Fiscal Year 1997, Historical Tables 1.2 and 10.1,
http://www.doc.gov/BudgetFY97/histtoc.html