Great Depression

Historicalbackground

Falseprosperity

In1929,theUSeconomybecameincreasinglyprosperous.TheindustrialproductionindexintheUnitedStatesaveragedonly67in1921(100from1923to1925),butithadrisento110inJuly1928,andto126inJune1929.WhatimpressespeopleevenmoreisthequotationsoftheUSstockmarket.Industrialists,academiceconomists,andgovernmentleadersallexpressedconfidenceinthefuture.TreasurySecretaryAndrewWilliamMellonalsoassuredthepublicinSeptember1929:"Now,thereisnoreasontoworry,thisboomwillcontinue."

October29,1929,CrowdsgatheredonWallStreetinNewYork,andthestockmarketplummetedthatday.TheGreatDepressionintheUnitedStatesranoutofAmericancapitalthatcouldhavebeenusedforEuropeaninvestment.

Intheautumnof1929,thestockmarketpricefelltoitslowestpoint,andaworldwideeconomicdepressionfollowed,andtheintensityanddurationofthedepressionwereunprecedented.Onereasonforthisunexpectedoutcomeseemstobeaseriousinternationaleconomicimbalance,whichdevelopedwhentheUnitedStatesbecameacreditornationonalargescale(aftertheFirstWorldWar).

Britainwasacreditorcountrybeforethewar,butitusedincomefromoverseasinvestmentandloanstopayforlong-termincome.Onthecontrary,theUnitedStatesusuallyhasatradesurplus,andduetodomesticpoliticalreasons,tariffsaremaintainedatahighlevel,thistradesurplushasalsobeenincreased.Inaddition,inthe1920s,becausemanycountriespaidwardebts,moneycontinuedtoflowintotheUnitedStates;theUnitedStates’goldreservesincreasedfrom1.924billionUSdollarsto4.499billionUSdollarsbetween1913and1924,whichistheworld’stotalgoldreserves.half.

Forseveralyears,thisimbalancewasoffsetbythelarge-scaleloansandinvestmentsoftheUnitedStatesabroad;from1925to1928,theaverageannualtotalforeigninvestmentoftheUnitedStatesreached1.1billionUSdollars.Ofcourse,thissituationeventuallystrengthenstheimbalanceandcannotcontinueindefinitely.Becausethepaymentwasdue,thedebtorcountryhadtoreduceitsimportsfromtheUnitedStates,andcertaineconomicsectorsoftheUnitedStates,especiallyagriculture,werealsodamaged.Inaddition,somefeltthattheymustdefaultonarrears,whichshooksomefinancialcompaniesintheUnitedStates.

TheimbalanceintheU.S.economyisasseriousastheimbalanceintheinternationaleconomy.Thefundamentalreasonisthatwageslagbehindrisingproductivity.From1920to1929,thehourlywageofworkersrosebyonly2%,whiletheproductivityofworkersinthefactorysoaredby55%.Atthesametime,theactualincomeoffarmersisalsodecliningduetothecontinuousdeclineinthepricesofagriculturalproducts,therisingtaxesandlivingexpenses.In1910,theincomeofeachfarmworkerwaslessthan40%oftheincomeofnon-farmworkers,andby1930,thisproportionhadfallenbelow30%.Thispovertyinruralareasisaseriousproblem,becauseatthattimetheagriculturalpopulationaccountedforone-fifthofthetotalpopulation.

TheweaknessoftheU.S.bankingindustrywasthelastfactorthatcontributedtothestockmarketcrashin1929.Atthattime,thereweremanyindependentbanksoperating,andsomebankslackedsufficientfinancialresourcestoovercomethefinancialturmoil.Therefore,whenabankfails,panicspreadsanddepositorswillrushtootherbankstowithdrawtheirdeposits,triggeringachainreactionthatdestroystheentirefinancialstructure.

Causeanalysis

RegardingtheGreatRecession(1929-1933),therearevariousbusinesscycletheoriesintheeconomicscircle.WhenanalyzingthecausesoftheGreatDepression,therearedivergentopinions.Thereisnoagreement.Perhapsthebestexplanationforthecauseofthedepressionisthattheexpenditureofoneorseveralsocialgroupshasdecreasedmorethantheexpenditureofothersocialgroupshasincreased.

In1929,consumerspurchased72%ofthegrossnationalproduct,industrialandcommercialinvestorsinvestedandconsumed18%,thefederal,state,andlocalgovernmentsintheUnitedStatesusedslightlylessthan10%,andtherestwasusedforExport.

From1929to1930,asinvestorsandconsumersreducedtheirspendingbyabout15billionU.S.dollars,spendingonthegrossnationalproductdecreasedbyabout14billionU.S.dollars.Althoughgovernmentspendinghasincreasedslightly,itsimpactisnegligible.Reflectingthedecreaseininvestmentandconsumerspending:dismissalsandunemploymentinthelabormarkethaveincreased,andindustrialandcommercialsalesandprofitshavedecreased.Basedontheaboveanalysis,itcanbeseenthataslongasthereasonsforthereductioninconsumerspendingandcorporateinvestmentareascertained,thecauseoftheGreatDepressioncanbedetermined.

Throughhistoricalanalysis,wecanclearlyseethatinthe1920s,therewerealreadyanumberoftrendsthatwereneglectedorignoredatthetimethatwerenotconducivetoeconomicdevelopment.However,agriculturehasneverfullyrecoveredfromthepost-wardepression,andfarmershavealwaysbeenpoorduringthisperiod.Inaddition,theso-calledhighwagelevelintheindustrialsector,manyofwhicharefalse.Inthepasttenyears,theapplicationofnewmachineshassqueezedoutalargenumberofworkers.Forexample,from1920to1929,thetotalindustrialoutputvalueincreasedbyalmost50%,whilethenumberofindustrialworkersdidnotincrease,andthenumberofworkersinthetransportationindustryactuallydecreased.Inserviceindustrieswherewagesareverylow,workershaveincreasedthemost,whichundoubtedlyincludesmanyskilledworkerswhohavelosttheirjobsduetotechnologicalprogress.Therefore,thosestatisticsthatindicateaslightincreaseinwagesdonotseemtoreflectthetruesituation.Sincetheworkersandpeasantsarebasicconsumers,thesetwotypesofpeoplewillhaveanimpactontheconsumergoodsmarketwhentheyencountereconomicdifficulties.

Underthesecircumstances,theexpansionofadvertisingandtheincreaseininstallmentcreditsalesinthe1920swillhaveundesirableconsequences.Installmentcreditsalesarestrivingtoexpandtheconsumergoodsmarket.From1924to1929,installmentsalesincreasedfromapproximatelyUS$2billiontoUS$3.5billion,whichshowsthatthegrowthratewasastonishing.Undoubtedly,theuseofinstallmentcreditsaleshasincreasedthesalesofdurableconsumergoodssuchascars,radios,furniture,andhouseholdelectricalappliances.However,thepromotionanduseoftheinstallmentsalesmethodalsoshowsthefactthatwithoutincreasingloans,theconsumergoodsmarketwillnotbeabletoaccommodatealargenumberofproductsproducedbytheindustrialsector.Moreover,fromaneconomicpointofview,thismethodofsellingandlendingitselfconceivescertaindangers;aslongasconsumercreditisreduced,thatis,instalmentcreditsales,consumerpurchasesarelikelytodecrease.Thishappenedin1929.

Inthe1920s,industrialproductionwasabletoexpandbecauseofhugeinvestmentsinnewfactoriesandnewequipment.Thisinvestmenthasenabledtheconstructionindustry,machinetoolmanufacturing,andsteelindustrytoemployalargenumberofworkers.Therefore,assoonascapitalexpenditureorinvestmentdecreases,workersintheproductionsectorsofthemeansofproductionwilllosetheirjobsinlargenumbers.By1929,theconsumergoodsmarketcouldnotaccommodatetheincreasedproductionofgoods,andtherewasnoneedtoexpandplantandequipment.Forexample,itisestimatedthattheoperatingrateoftheentireindustryintheUnitedStatesin1929onlyreached80%.Undertheseconditions,itisnowonderthattheinvestmentamount(calculatedin1958U.S.dollars)droppedfrom40.4billionU.S.dollarsin1929to27.4billionU.S.dollarsin1930,andthento4.7billionU.S.dollarsin1932.NS.Thereductionininvestmenthasledtothebankruptcyofproductionenterprisesandtheunemploymentofworkers.Thisproblemisexacerbatedbythereductioninhousingconstruction.Housingconstructionreacheditspeakin1925,andsincethenithasgonedownhill.Only500,000houseswerebuiltin1929(about1millionin1925).After1927,theautomobileindustryalsodeclinedsharply.

Unemploymentofworkersintheproductionsectorofthemeansofproductionwillreducethesalesofconsumergoods,whichwillleadtounemploymentofworkersintheproductionsectorofconsumergoods.Thedecreaseinsalesofconsumergoods,inturn,hasfurtherreducedinvestment.Theintensifiedinteractionbetweenthetwomajorsectorshasdrivenadeclineinproductionandarisingunemploymentrate.Evenfavorablefactorssuchaslowtaxratesandhighprofitsmayhavecontributedtotheself-eruptionofthecrisis.Infact,mostoftheincreasedincomeduringthatperiodfellintothepocketsofafewpeopleorafewfamilies.

ApaperpublishedbytheBrookingsInstitutionin1934oneconomicissuesinthe1920swrote:Thisisthecase.Thismeansthattheincomeofthepeoplehasincreasedduringthisperiod,andtheincomeleveloftheupperclasshasincreasedfaster.Becausewiththerealizationofthehighincomeoftheupperclass,thesavingpartoftheirincomehasincreasedmorethantheconsumptionpart.Soon,thereisalsoatrendfortherichandtheirfamiliestousetheaccumulatedincomemoreandmoreasinvestment."

Fromaneconomicpointofview,theincomedistributioninthe1920swasincreasedbytighteningconsumption.Investmenttrends.Lookingbackatthisperiodofhistory,wecanseethatconsumershavemoremoneyandinvestorshavelessmoney,andthenationaleconomymaybemorestable.Theprosperityofthestockmarketin1929,whichwascausedtosomeextentbybankcredit,alsoreflectedexcessfunds,makingitunprofitableforcapitaliststoinvestinthepurchaseandconstructionofplantandequipment.

Theprosperityofthe1920swasmainlyattributedtotheabundanceofnaturalresources,thegrowthofindustrialandagriculturalproduction,technologicalprogress,theincreaseoflaborproductivity,theexpansionofconsumptionandtheprosperityofforeigntrade.However,thepovertyofmanyAmericansandtheexistenceofcertainweaknessesinthenationaleconomyledtotheoutbreakoftheGreatDepression.Nevertheless,untiltheendofthe1920s,mostAmericanswereblindlyoptimisticthattheprosperitywouldcontinue.

Thecourseofevents

The1920swerecalledthe"newera,"andwealthandopportunityseemedtohaveopenedthedoortotheAmericanswhohadjustwonintheFirstWorldWar.Thewholesocietyiseagerfornewtechnologiesandnewlifestyles,and"conspicuousconsumption"hasbecomethetrendofthetimes.PresidentHooveralsobelievesthat"wearegettingthedecisiveeveofthewaronpoverty,andtheslumswilldisappearfromtheUnitedStates."

OnOctober24,1929,theUnitedStatesusheredinits"BlackThursday"(thesuddencollapseoftheAmericanWallStreetstockmarket).Onthisday,theAmericanfinancialindustrycollapsed.Thestocksfellfromthetoptotheabyssovernight,andthepricefellsofastthateventheautomaticdisplayofstockmarketconditionscouldnotkeepup.

OnOctober29,1929,everyoneontheNewYorkStockExchangewascaughtinawhirlpoolofsellingstocks.Thestockindexplummetedbyanaverageof40%fromthepreviouspeakof363.ThousandsofAmericanswatchedtheirlifesavingsdisappearinafewdays.ThisisthedarkestdayinthehistoryofAmericansecurities.ItisthemostinfluentialandmostharmfuleconomiceventinthehistoryoftheUnitedStates.TheimpacthasaffectedWesterncountriesandtheentireworld.Sincethen,theUnitedStatesandtheworldhaveentereda10-yeareconomicdepressionperiod.Therefore,thisdayisregardedasalandmarkeventthatstartedduringtheGreatDepression,andbecauseitcoincideswithTuesday,itiscalled"BlackTuesday."InjusttwoweeksfromOctober29toNovember13,1929,atotalof30billionUSdollarsofwealthdisappeared,equivalenttothetotalexpenditureoftheUnitedStatesinWorldWarI.ButthecollapseoftheU.S.stockmarketisnothingbutthecraterofadevastatingeconomiccrisis.

Atthattime,anurseryrhymewaspopularinNewYork:“Mellonpulledthewhistle,Hooverrangthebell,Wall.Streetgavethesignalandthecountrywenttohell)Withthecollapseofthestockmarket,theU.S.economywasplungedintoadevastatingdisaster.Aterriblechainreactionsoonoccurred:crazyruns,bankfailures,factoryclosures,andunemployment.,Povertyiscoming,organizedresistance,thebrinkofcivilwar.Agriculturalcapitalistsandlargefarmersdestroyedalargenumberof"surplus"products,usedwheatandcornasfuelforcoal,andpouredmilkintotheMississippiRiver,turningtheriverintoa"galaxy."Thehomelessinthecitybuiltsimpleshelterswithwoodenboards,oldironsheets,tarpaulins,andevenkraftpaper.Thevillagewherethesehutsgatheriscalledthe"HooverVillage."Thebeggingbagofthehomelessmaniscalledthe"HooverBag".Thecarthatispulledbyanimalpowerbecauseoftheinabilitytobuyfueliscalledthe"HooverCar".Eventhenewspapercoveredbythehomelessmansleepingonthestreetbenchisalsocalledthe"Huover".Buddhacarpet".Applevendorsonthestreetsbecameoneofthemostwell-knownsymbolsoftheGreatDepression.Amongthosewhoareforcedtomakealivingbyoperatingamobilefruitstand,therearemanyformerlysuccessfulmerchantsandbankers.

ThegreatcollapseofthestockmarketledtotheGreatDepressionthatlastedforfouryears.TheeconomiccrisisquicklyspreadfromtheUnitedStatestootherindustrialcountries.Formillionsofpeople,lifehasbecomeastruggletoeat,wear,andlive.Inordertosafeguardtheirowninterests,variouscountrieshavestrengthenedtradeprotectionmeasuresandmeans,furtherexacerbatingthedeteriorationoftheworldeconomicsituation,whichisanimportantsourceoftheoutbreakoftheSecondWorldWar.

TheGreatDepressionalsocausedserioussocialproblems:duringtheGreatDepression,about2to4millionmiddleschoolstudentsdroppedoutofschool;manypeoplecouldnotbearthephysicalandpsychologicalpainandcommittedsuicide;socialsecuritywasdeterioratingdaybyday.Themostimportantissueisunemployment.IntheUnitedStates,thetotalnumberofunemployedpeoplehasreached8.3million.InallcitiesintheUnitedStates,thepoorlineuptoreceivefoodforseveralblocks.IntheUnitedKingdom,5-7millionpeopleareunemployed,andtheyhavetowaitinlongqueuesinthelabormarket.ThedisastercausedbytheGreatDepressionintheUnitedStatesisunprecedentedinhumanhistory.Itisevenworsethantheso-called"three-yearfamine"duringChina'sthree-yeardifficultperiodfrom1959to1961.TheGreatDepressionintheUnitedStatesbrokeoutasevereeconomiccrisisfrom1930to1933.TherewasagreatfamineandwidespreadmalnutritionthroughouttheUnitedStates,resultingintheabnormaldeathofalargenumberofpeople.Themostconservativeestimateisthatatleast7millionpeopledied,accountingforabout7%oftheUnitedStatesatthetime.TheGreatDepressionofthe1930sintheUnitedStates:Millionsofpeoplemustlivelikebeasts.

Corereminder:"GloryandDreams",whichrecordsAmericanhistory,oncewrote:"Millionsofpeoplearesavedfromdeathonlybecausetheylivelikebeasts."Thisscenariodescribesexactlywhatitdescribed.People'slivelihoodintheUnitedStatesduringtheGreatDepression.

Thesourceofthisarticle:"GuangzhouDaily"November12,2008,A14,Author:Anonymous,originaltitle:"Americansatthetime"livedlikebeasts""

"GloryandDreams",whichrecordsAmericanhistory,oncewrote:"Millionsofpeoplearesavedfromdeathonlybecausetheylivelikebeasts."ThisscenariodescribesthelivelihoodoftheAmericanpeopleduringtheGreatDepression.

OnOctober28,1929,theNewYorkStockExchangestockindexplummeted13%.Thenextday,theDowJonesIndexplummeted,plummeting22%.ThemostfamouseconomiccrisisinthehistoryoftheUnitedStateskickedoff,andpeopleweregreetedbythe10-yearGreatDepression.

In1932,therewereabout2millionAmericanswanderingaround-morethan250,000ofthemwerebetweentheagesof16and21.Amongthese"wanderingandhelplesspeople"calledbythemediaatthetimeoftheGreatDepression,therewereempty-handedtenantfarmers;therewerefarmerswhohadlefttheirhometownsforthreeyearsbecauseofthedrought;andtherewerealargenumberofyoungpeoplewhohadjustgraduatedfromcollegeandcouldn'tfindajob.Andsuddenlyunemployedfrowningmiddle-agedmenwithsickbabies-thesepeoplerunaroundeverydayandhavenofixedhomes.

Amongthesepeople,thereisnoshortageofwell-dressedmiddle-classpeople-high-spiritedbankpresidentsorfamouswriterswhohavepublishedcommentsinfamousnewspapers,butnowtheyknockonthedooratnightorcurlupinthecitytolineupforbread.Inthecrowd.

ThisisamicrocosmofthereallifeofAmericanssincetheGreatDepressionthatstartedon"BlackTuesday"in1929.AccordingtotheestimateofFortunemagazineinSeptember1932,thereare34millionadultmen,womenandchildrenintheUnitedStateswithoutanyincome,whichiscloseto28%ofthetotalpopulation.Andthisresearchreport,likeotherreports,doesnotincludethe11millionruralhouseholdssufferinginanotherhell.

Therearemanylegendsaboutjobhuntingaround1932.Someofthemsoundbizarre,buttheyaretrue.

TherewasindeedsomeonestayingatthedooroftheDetroitemploymentagencyallnight.TherewasindeedanArkansasmanwhowalked900milestofindajob.

Anemploymentagencyon6thStreetinManhattanrecruited300people,andindeed5,000peopleapplied.

SomeoneinWashingtonStatedidsetfireinthewoodssotheycouldhirehimasafirefighter.

Insuchaneraofeconomicdepression,morethan15millionpeoplewerelookingforworkeverywhere,buttherewasnojobtodoanywhere."BusinessWeek"conductedasurveyandconfirmedthatmanypeoplenolongerliketheUnitedStates,somehavealreadylefttheUnitedStates,andsomearetryingtoleave.Intheearly1930s,thenumberofpeoplewhomovedabroadexceededthatofpeoplewhomovedineveryyear.

PeoplewhoexperiencedtheGreatDepressionchangedtheirminds.Theworkerswokeupfromthenumbnessofthe1920sandlaunchedacombativestrike.LiberalswereattractedbytheprosperityoftheSovietUnionandbecameMarxists.ConservativesareincreasinglyturningtofascismbecauseoftheirfearofBolshevism.

Rooseveltbecamethebestbroadcastpropagandist

Amongthesit-downpastimes,themostcommononeislisteningtotheradio.

Thepublic’sdesirefornewsanalysisandnewsinterpretationhasbroughtcurrentaffairscommentatorsRaymondGramSwain,HVKattenborn,LowellThomas,GabrielHittandothers.Withunprecedentedprestige,millionsofpeoplelistenedintentlytotheirviewsoninternationalcurrentaffairs.Between1932and1939,theamountofmessagessentovertheradioalmostdoubled.

ThebestbroadcastpropagandistisPresidentRoosevelthimself.Hisheart-warmingcivilianappellation"myfriend"wasalreadyusedasearlyas1920whenhewasrunningforvicepresident.Adopted.Healwaysappealstothepeopledirectlyandintimately.Thisgesturehascreatedapersonalleadershipstylethatisunprecedentedintermsofitsinfluence.Afteradayof"firesidetalk",Ioftenreceive50,000lettersfromtheaudience.TherecordingofallthesespeechesshowsthechangesinRoosevelt’sspeechskills,fromtheold-fashionedHongZhongDalustyle,plustheeloquentandpowerfulpauseslearnedinthepre-radioera,tothelowerpitch,andSofter,morerelaxed,andmorecharmingconversationsaremoresuitableforlistenerswhocanonlyhearthesoundandnotseetheperson.

Thepopularityof"BoggyWoogie"

Atthebeginningof1934,perhapsasaharbingerofeconomicrecovery,thespiritofjazzwasreborn.ThisrevivalwasmainlybroadcastthroughgorgeousclarinetrecordsandBennyGoodman'sdanceband.BennybetterinterpretswhatEuropeanconnoisseurscall"hotjazz".Itquicklygainedanewname:swing.

From1935tothewinterof1936,when"improvisations"and"hotmusicclubs"sprungupallovertheUnitedStates,areporterwrote:"Swingistojazz,likeThesoulofpoetryisinpoetry."-apopulartermthathasinadvertentlybecomepopular.Thisis"BoogieWoogie",whichmeansakindofpianomusic.Theplayerusesacontinuousscrollingleft-handedprogram,mixedwiththerighthandtodowhateverhewants.Improvisationalcreativity.

Millionsofyoungpeoplehaverecognizedthisnewstyle.Thoseenthusiasticappreciatorscallthemselveshep-cats(jazzfans),andthosewhoactivelyparticipateinthemcallthemselvesjitterbugs(jazzfanatics).Whentheyare"attheirbest",theresultisoftenmoredynamic,notmoreelegant.

"MickeyMouse""DonaldDuck"comeoutb>

Film-inthelasttenyears,itwasthefourthlargestindustryinthecountry,anditisstillthemostimportantcommercialentertainment.Inparticular,thejoyofhearingthevoicesofstarswhohavelongadmiredinsilentmoviespushedthefilmindustrytothefirstwaveofsmallclimaxesduringtheGreatDepression.

DisneycametoHollywoodfromtheMidwestoftheUnitedStatesin1926andcreated"MickeyMouse"twoyearslater.Inthesoundfilm"WillieSteamboat"(1928),thisresourcefulrodentwenttotheworldBeforetheroadoftheprotagonist,MickeyMouseinthesilentfilmwasnotsuccessful.Attheendofthe1930s,itissaidthatMickeyMousehasgraduallygivenwaytoanothercartooncharacter"DonaldDuck"latercreatedbyDisney.

Disney,theauthorofthese"FairyTalesoftheMachineAge",alsodemonstratedhisversatilityin"SnowWhite"(1938)and"Fantasia"(1940).Theformerishisfirstfull-lengthfilm,whichwasshotinturnbynearly500,000paintings,whilethelatterisaboldattempttocombineclassicalmusicwiththeartofpainting.

Thecontentofmostmoviesisdesignedtoescapereality,andmostofthemreflectthetastesoftiredortiredadults.Whattheyseekisaparadiseofluxuryandlegend,sexandemotion,whichisfarlesshealthyforyoungmoviefansthanDisney'sworld.

"Withoutalibrary,Iwascrazyearly"

WhentheGreatDepressionwasapproaching,about19outof20adultswerenewspapersOfthereaders,three-quartersreadmagazines,andone-halfreadmagazines.Theeconomiccrisishasonlycausedminordamagetonewsstandsandmagazineshelves-thecostofpatronizingtheseplacesisalwayssmall,butithasbroughtaseriousblowtothebookindustry.Atthesametime,publicbooksarerapidlydeveloping.Themuseumisalsoinadifficultperiodoffunding.

Millionsofpeoplewhohavenothingtodosuddenlyfindthatthepubliclibraryissimplyaclubforthepoor,awarmandquietplacewhereyoucanbrowseandtakeanap.

In1933,theAmericanLibraryAssociationestimatedthatthenumberofnewborrowerssince1929wasbetween2millionand3million,andthetotalbookcirculationincreasedbynearly50%.Customersoccasionallysaidtothelibrarian:"Ifitweren’tforthelibrary,Imighthavegonecrazyorcommittedsuicide."

Atfirst,novelswerethebiggestbeneficiaries.WesternnovelsandlightheartedThelargenumberofreadersofthemagazinegraduallyincreased,andthenslowlyturnedtobooksontechnicalandintellectualtopics.Unfortunately,thelibrarygroanedundertheburdenofpovertyatthemomentofthegreatestopportunityfordevelopment.

In60largecities,thecostofbuyingbookshasshrunkfromtwotothreemillionUSdollarsayearin1931tolessthanonemillionUSdollarsin1933.IntheyearthattheChicagoWorld'sFairwasheldin1933,Chicagotrieditsbesttopresentitsbesttotheworld.However,theChicagoLibraryfacednomoneytobuybooksforthethirdconsecutivequarter.Theinabilitytoreplacebrokenoldbooks,theinabilitytoimprovepoorservices,andshortentheborrowingtimearethemostcommonobstacles.ItwasnotuntilthoseyearsinthemiddleoftheGreatDepressionthattherejuvenatingnationaleconomyallowedthelibrarytoreturntoitspaststandards.

"Reader'sDigest"hasalargecirculation

UndertheblowoftheGreatDepression,magazinesGenerally,itremainsstable,andthecirculationhasincreasedslightly.Weeklymagazineshaveanadvantageovermonthlymagazines.Documentarystoriesandlovemagazinesarespiritualopiumsthatescapereality,boastingthattheirtotalcirculationin1935wasalmostone-thirdmorethanin1921;butanotherhypotheticalplacebo,humormagazines,failedtoregroup.By1935,itscirculationwasonlyalittlemorethanhalfofwhatitwasbeforetheGreatDepression.Inadditiontothetemporarysuccessof"BigKing","Laughs"thiscrisisfailedtomeetpeople'sneeds.

Religiousmagazinescontinuedtodecline,butpopularscienceandmechanicalmagazinespersisted.Liberalandradicalmagazineshitanewhighin1931,butinthefollowingyear,theylostnearlyhalfoftheircirculation,reachingtheirlowestpointin1934,butstartingtoclimbslightlyafter1935.

Women’sjournals—their12millionsubscribershavenotdroppedsignificantlyevenindifficulttimes—continuetosupplyromanticlegendsandsentimentality,andonlymakeasmallpointabouttherisingeconomicandpoliticaldebatesconcession.Thefirstmagazine"Mr.Fashion"dedicatedtomenwasfoundedin1933.

"Reader'sDigest"isapocket-sizedmonthlymagazine.Atthebeginningofthisperiod,ithad250,000subscribers.Bytheendofthisperiod,itscirculationwasclosetosevenoreightmillioncopies,includingForeignlanguageversionandBrailleversion.Thisisthelargestcirculationmagazineever.PartofitssuccessstemsfromtheGreatDepression-atthattime,manyfamiliesdidnothavetheabilitytosubscribetoseveralmagazinesfordifferentpurposes,sotheyhadtosubscribetothismulti-purposemagazine-partlyfromitsextractionoftheessenceofotherpublicationspractice.Itsrecipescoverawiderangeofarticles,fromarticleslookingforaglimmerofhope,tostoriesabouthappylivestoldbylameandblindpeople,mixedwithGonzoaboutcleverpuppiesandchipmunks,andaseriousdirtyjoke.

"ToughGuy"HemingwayInfluencingageneration

Intheentirefieldoffictionalliterature,themostimportantThenovelistisErnestMillerHemingway.IntheeraoftheGreatDepression,hestartedwith"Farewell,Weapon"(1929)andendedwith"ForWhomtheBellTolls"(1940).Theformertalkedaboutadeeplymovingloveintheshadowofwaranddeath.Thestory,thelatterissomewhatsimilarintheme,butthebackgroundisanewstruggle:theSpanishCivilWar,theAmericanfreelancewriterparticipatedinthiswar.

Hemingway'sloveforink,intermittentdialogue,andhisspecialdescriptionofextrovertedmenhaveprofoundlyaffectedthisgeneration.Thedisciplesofhistoughurbanschoolareevenmoretenaciousthanthemaster.

ThomasWolfeusedhispentopaintanunforgettablepictureoftheGreatDepression:poorManhattanhuddledincityhalltoiletsforheating,foreignresidentsincheapapartments,hauntedTheragged,lonelypeopleonthesubwayandthemobilecoffeestandallnight.WolfehasalwaysshudderedaboutbeingheadingtowardstheNaziabyss,suchas"TimeandtheRiver"(1935)and"YouCan'tGoHome"(thisbookwaspublishedtwoyearsafterhisprematuredeathin1938),whichsymbolizesAmericansarelostinconfusion,glory,frustration,andapremonitionoflifeitself.

Solution

Inearly1933,FranklinRoosevelt(FranklinRoosevelt)replacedthebatteredHooverandwaselectedasthe32ndPresidentoftheUnitedStates.Inresponsetotherealityatthetimeandconformingtothewillofthemassesofthepeople,heresolutelyimplementedaseriesofpolicymeasuresaimedatovercomingthecrisis,whichwascalledthe"RooseveltNewDeal"inhistory.ThemaincontentoftheNewDealcanbesummarizedbythe"threeRs".Namely,Recover,Relief,andReform.BecausetheGreatDepressionwastriggeredbyafinancialcrisiscausedbywildspeculation.PresidentRoosevelt’sNewDealalsostartedwithfinancialrectification.Amongthe15importantlegislationenactedduringtheso-called"HundredDaysNewDeal"(March9toJune16,1933),lawsrelatedtofinanceaccountedfor1/3.WhenRooseveltwassworninasPresidentonMarch4,1933,therewasalmostnobankinthecountrythatwasopen,andcheckswerenolongeravailableinWashington.AtRoosevelt'srequest,onMarch9th,theUSCongresspassedthe"EmergencyBankingAct",decidingtoadoptasystemofindividualreviewandissuanceoflicensesforbanks,allowingsolventbankstoresumebusinessassoonaspossible.FromMarch13thto15th,14,771bankshavereceivedlicensestoreopen.Comparedwiththe25,568beforethecrisisbrokeoutin1929,10,797bankshavebeeneliminated.TheextraordinarymeasurestakenbyRoosevelttorectifythefinancesplayedahugeroleinclearingupthemessandstabilizingpeople'shearts.Publicopinioncommentedthatthisactionwaslike"alightningboltinthedarksky."Whilerectifyingthebank,RooseveltalsotookactionstostrengthentheUS'foreigneconomicposition.SincetheannouncementofthesuspensionofgoldexportsonMarch10,1933,majormeasureshavebeentakenoneafteranother:onApril5,thebanonprivatestorageofgoldandgoldsecuritieswasannounced,theexchangeofU.S.dollarbillsforgoldwasstopped,andonApril19,theexportofgoldwasbanned.Abandonthegoldstandard;onJune5,publicandprivatedebtswereabolishedtoberepaidbygold;onJanuary10,1934,itannouncedtheissuanceof3billionU.S.dollarbanknotessecuredbynationalsecuritiesanddepreciatedtheU.S.dollarby40.94%.ThedepreciationoftheU.S.dollarstrengthenedthecompetitivenessofAmericanproducts.Thesemeasureshaveplayedanimportantroleinstabilizingthesituationandchannelingthebloodcirculationofeconomiclife.

Duringthe"HundredDaysNewDeal,"Roosevelt,whilesolvingthebankingproblem,alsotriedtourgetheParliamenttopassthe"AgriculturalAdjustmentLaw"andthe"NationalIndustrialRejuvenationLaw".ThesetwolawsbecametheentireTheright-handmanoftheNewDeal.Rooseveltrequiredcapitaliststoabidebytherulesof"faircompetition"andsetthescale,price,andsalesscopeofeachenterprise;setminimumwagesandmaximumworkinghoursforworkers,therebyrestrictingmonopoly,reducingandeasingthenervousclasscontradiction.Afterreceivingthereluctantsupportoflargecompanies,Rooseveltthentriedhisbesttowinthesupportofsmallandmedium-sizedenterprises.HesaidthatitisimportantforlargecompaniestoaccepttheIndustrialRejuvenationLaw."Theareathatproducesfruitfulresultsliesinsmallemployers.Theircontributionwillbetoprovidenewemploymentopportunitiesfor1to10people.Thesesmallemployersareactuallythebackboneofthecountry.Theimportantpart,andthesuccessorfailureofourplandependstoalargeextentonthem."Thedevelopmentofsmallandmedium-sizedenterpriseshasplayedapositiveroleinthestabilityofAmericansocietyandtherecoveryoftheeconomy.

AnotherimportantcontentoftheNewDealisreliefwork.InMay1933,CongresspassedtheFederalEmergencyReliefActandestablishedtheFederalEmergencyReliefAgency,whichquicklyallocatedallkindsofrelieffundstothestates.Thefollowingyear,thesimplereliefwaschangedto"reliefforwork"toprovidetheunemployedwithassistance.Theopportunitiesforpublicutilitiessafeguardtheself-relianceandself-esteemoftheunemployed.IntheearlydaysofRoosevelt’sadministration,morethan17millionunemployedpeopleacrossthecountryandtheirrelativesdependedonthehelpandcharityofthestateandmunicipalgovernmentsandprivatecharities.Butthispartofthefinancialresourcesisnothingcomparedtosuchahugearmyofunemployed.Tosolvethiscomplicatedsocialproblem,onlythefederalgovernmentcandoit.ThefirstmeasureofRoosevelt'sNewDealwastourgeCongresstopasstheCivilResourceProtectionTeamplan.Theplanspecificallyrecruitsyoungpeopleaged18to25,whoarestrongandhaveahighunemploymentrate,toplanttreesandprotectforests,preventfloods,waterandsoilconservation,roadconstruction,openforestfirelinesandsetupforestwatchtowers,thefirstbatch250,000peoplewererecruitedtoworkin1,500campsacrossthestates.BeforejoiningthewarintheUnitedStates,morethan2millionyoungpeoplehadworkedinthisorganization.Theyopenedupmorethan7.4millionacresofstate-ownedforestareasandalargenumberofstate-ownedparks.Theaveragepersonworksfor9monthsperperiod,andmostofthemonthlysalaryisusedforfamilysupport,whichexpandsthescopeofreliefandthecorrespondingpurchasingpowerintheentiresociety.RooseveltalsourgedCongresstopasstheFederalEmergencyReliefAct,establishafederalreliefagency,reasonablydividetheuseratiobetweenthefederalgovernmentandthestates,andformulatepreferentialpoliciestoencouragelocalgovernmentstousefordirectrelief.Thepoorandtheunemployed.DuringtheNewDealperiod,theUnitedStateshadalargenumberoflaborandreliefagencies,whichcanbeintegratedintotwomajorsystems:thePublicWorksAgency(thegovernmenthasallocatedmorethan4billionUSdollars)andtheCivilEngineeringAgency(Thelatterhasbuilt180,000smallengineeringprojectsacrossthecountry,includingschoolbuildings,bridges,dikes,sewersystems,postofficesandadministrativeagenciesandotherpublicbuildings,attracting4millionpeopletowork.Fortheunskilledunemployedworkerstofindaplacetouseit.Later,severalnewworkreliefagencieswereestablished.ThemostfamousofthesearetheNationalEngineeringAgency,whichwassetupbyCongresstoallocate5billionU.S.dollarsandtheNationalYouthAdministrationforyoungpeople.Thetwoemployatotalof23millionpeople,accountingformorethanhalfofthenation’slaborforce.BytheeveofWorldWarII,thefederalgovernment’sexpendituresforvariousprojectsandasmallamountofdirectreliefcostsamountedto18billionU.S.dollars.TheU.S.governmentbuiltnearly1,000airfields,morethan12,000sportsfields,morethan800schoolbuildingsandThehospitalnotonlycreatedjobopportunitiesforcraftsmen,unskilledworkers,andtheconstructionindustry,butalsoprovidedtensofthousandsofunemployedartistswithvariousjobs.ItisthemostambitiousandsuccessfulreliefprogramundertakenbytheUSgovernmentsofar.Thissumofmoneypassesthroughthepocketsofworkers,throughdifferentchannelsandconsumption,andreturnstothehandsofcapitalists.Itbecomesthe"pumpingwater"forstimulatingprivateconsumptionandpersonalinvestmentwithgovernmentinvestment.

Thesecondphaseofthe"NewDeal"startingin1935,onthebasisofthefirstphase,focusedonpassinglawsandregulationssuchastheSocialInsuranceAct,theNationalLaborRelationsAct,andthePublicUtilitiesActtoconsolidatetheNewDealintheformoflegislationResults.Rooseveltbelievedthatagovernment"ifitcannottakecareoftheelderlyandthesick,cannotprovidejobsforthestrong,cannotinjectyoungpeopleintotheindustrialsystem,andallowtheshadowofinsecuritytohangovereveryfamily,thenitwillnotbeabletosurvive,orItisthegovernmentthatshouldexist."Socialinsuranceshouldberesponsiblefortheentirelife"fromcradletograve".Tothisend,the"SocialInsuranceLaw"wasenacted.Thelawstipulatesthatallwageearnerswhoretireattheageof65canreceiveapensionof10to85USdollarspermonthaccordingtodifferentwagelevels.Regardingunemploymentinsurance,Rooseveltexplained:“Itnotonlyhelpsindividualsavoidrelyingonreliefwhentheyaredismissedinthefuture,butitalsoeasestheimpactofeconomichardshipbymaintainingpurchasingpower.”Thesourceofinsurancemoneyishalfoftheemployees.Theemployeeandtheemployereachpayaninsurancepremiumequivalentto1%oftheworker’swages,andtheotherhalfispaidbythefederalgovernment.ThissocialinsurancelawreflectsthestrongdesireoftheworkingpeopleandiswelcomedandpraisedbytheoverwhelmingmajorityofpeopleintheUnitedStates.

OnMay24,1937,RooseveltsubmittedtoCongressawidelynoticedaddressontheminimumwageandmaximumworkinghourslegislation.Thespeechacknowledgedthat"one-thirdofourpopulation,mostofwhomareengagedinagricultureorindustry,donoteatwell,wearwellandlivewell";"Wemustbearinmindthatourgoalistoimproveratherthanreducethosewhoarecurrentlymalnourished.Thelivingstandardsofthosewhodon’tdresswellandlivepoorly.Weknowthatwhenalargepartofourworkersarenotyetemployed,overtimeworkandlowwageswillnotincreasenationalincome.”ByCongressNoactionwastakenonthebill.OnOctober12,1937,RooseveltproposeditagainuntilitwaspassedonJune14,1938.Thisisthe"FairLaborStandardsAct"(alsoknownasthe"WagesandHoursAct").Itsmainprovisionsinclude40hoursofworkperweekand40minutesofminimumwageperhour;childlaborundertheageof16isprohibited,anditisprohibitedinhazardousindustries.Workersunder18yearsofage.Withregardtotheminimumwage,astheeconomydevelops,itwillbeadjustedinthefuture.Althoughthesesociallegislationsbelongtothecategoryofsocialreform,theyareofgreatbenefittothepeople,especiallywageworkers.Inordertosolvetheproblemofthefederalfundingsourceofthesocialinsurancesystem,Rooseveltimplementedaprogressivetaxbasedonincomeandassetsforthefirsttime.31%isleviedonnetincomeof50,000USdollarsandinheritanceof40,000USdollars,and75%isleviedoninheritancesofmorethan5millionUSdollars.Inthepast,thecorporatetaxwasalways13.75%.Accordingtothe1935taxlaw,thetaxrateforcompanyincomebelow50,000USdollarswasreducedto12.5%,15%forthoseabove50,000USD.

By1939,theNewDealimplementedbyPresidentRoosevelthadachievedgreatsuccess.TheNewDealinvolvesalmostallaspectsofAmericansocialandeconomiclife.MostofthesemeasuresareaimedatspecificconsiderationsfortheUnitedStatestogetridofthecrisisandminimizetheconsequencesofthecrisis.Othersarelong-termplansbasedonthelong-termdevelopmentgoalsofcapitalism.ItsdirecteffectisIthaspreventedtheUnitedStatesfromamajoreconomiccollapseandhelpedtheUnitedStatesgetoutofthecrisis.Since1935,almostalleconomicindicatorsintheUnitedStateshavesteadilyrebounded.ThegrossnationalproducthasincreasedfromUS$74.2billionin1933toUS$204.9billionin1939,andthenumberofunemployedpeoplehasdroppedfrom17millionto8million,restoringnationalrelations.Theconfidenceinthenationalsystemfreeditselffromthethreatoffascismtothedemocraticsystem,whichenabledtheUnitedStatesincrisistoavoidfiercesocialunrest,whichcreatedafavorableenvironmentandconditionsforthesubsequentparticipationoftheUnitedStatesintheanti-fascistwar,whichlargelydeterminedit.ThedirectionofsocialandeconomicdevelopmentintheUnitedStatesafterWorldWarII.

ItistruethattheultimategoalofRoosevelt’s"NewDeal"measuresistostrengthennationalcapitalismtoovercomeeconomiccrisesandconsolidatethecapitalistsystem.The"NewDeal"isanexperimentaltreatmenthetriedtotreatdiseasesincapitalistsocietywhenconventionaltreatmentswerenoteffective.Infact,certainmeasuresofthe"NewDeal"arealsoinadequate,andthishasoftenbecomeareasonforhispoliticalopponentstoattack.Classeswhoseinterestssufferedduringtheimplementationofthe"NewDeal"havealsoboycottedandslandered.EventheIndustrialRenaissanceLawandtwootherbills,animportantpartoftheearlyNewDeal,wereruledunconstitutionalbytheSupremeCourtafteralapseoftwoyears.However,aslongaswetrulyexaminethe"NewDeal"withahistoricalmaterialistattitude,itisnotdifficulttoseethatthe"NewDeal"hascorrectedthepulseofAmericaneconomicandsociallifeand"enablespeopletoreturntoworkandrevitalizeourbusinesses."Theslogan""conformstotheinterestsoftheworkingpeopleandfullyarousestheirenthusiasm.Roosevelttookmaintainingthenormaloperationofthenationaleconomyandensuringcitizenemploymentasthegovernment'sresponsibility,especiallythelargenumberofconstructionprojectsbuiltintheformofwork-for-work,whichnotonlygreatlyeasedunemployment,butalsostimulatedtheearlyrecoveryoftheeconomy,andmanyinfrastructures.ConstructionhasgreatlybenefitedtheAmericaneconomy.TheNewDealleftbehindalargenumberofmeasuresandpoliciestopreventtheGreatDepressionfromhappeningagain,layingasolidfoundationfortheUnitedStatestoinvestinWorldWarIIanditsrapidriseafterthewar,andRooseveltbecamethemostpopularamongthepublicintheUnitedStatesandtheworldsinceAbrahamLincoln.Thepresidentisalwaysintheannalsofhistory.

Historicalinfluence

Politicalinfluence

ThegeneralinfluenceoftheGreatDepressionledto:

1.IncreasedgovernmentpolicyparticipationintheeconomySex,namelyKeynesianism;

2,intensifiedeconomicnationalismintheformoftariffs;

3,theriseofright-wingthoughts.Comparedwithothersinglecauses,theGreatDepressionisthemostabletoexplainwhytheEuropeancontinentandLatinAmericancountriesgraduallyright-wingpoliticsbetween1932and1938.

4.InordertogetridoftheGreatDepression,GermanyandJapanbegantoembarkontheroadofforeignaggressionandexpansionandtheroadoffascism.

5.TheriseofdictatorssuchasAdolfHitlerandHidekiTojoindirectlycausedtheoutbreakoftheSecondWorldWar.ItisworthnotingthattheGreatDepressionmadeHitler'ssuccesspossible,butthisisbynomeansinevitable.Thispossibilityturnedintorealityduetoacombinationofotherfactors,includingHitler’sowntalents,assistanceprovidedbyvariousvestedinterestgroups,andthelackofvisionofhisopponents-theyunderestimatedHitlerandfailedtouniteasanopposition.standup.

6.ItprovidesafavorableperiodfortheindustrialdevelopmentoftheSovietUnion.TheGreatDepressionhadlittleeffectontheSovietUnion.FortheSovietUnion,theperiodoftheGreatDepressionwasaperiodofindustrialexpansion.TheSovietUnion’simmunityfromtheGreatDepressionseemedtoprovetherationalityofitspoliticalsystemandpromptedtheriseofpoliticalmovementsinitsneighboringregions.

Socialimpact

AstheUnitedStatesoccupiesanimportantpositionintheworldeconomy,itseconomiccrisiseventuallytriggeredtheGreatDepressionthroughoutthecapitalistworld.Thiseconomicdepressionstartedwiththefallinagriculturalproductprices:itfirstoccurredinthepriceoftimber(1928),whichwasmainlyduetotheSovietUnion’stimbercompetition;butthebiggerdisastercamein1929,whentheCanadianwheatwasoverwhelmed.Production,theUnitedStatesisforcingdownthepricesofbasicgrainsinallagriculturalproductionareas.Whetherit’sEurope,AmericaorAustralia,theagriculturalrecessionwasfurtherexacerbatedbythefinancialcollapse,especiallyintheUnitedStates.AspeculativefevercausedalargeamountoffundstobewithdrawnfromEurope,followedbyapanicWallStreetstockmarketcrashinOctober1929..In1931,theFrenchbankertookbacktheloantotheAustrianbank,butthiswasnotenoughtorepaythedebt.

Thislarge-scaledisasterbrokethesystemsofmanycountriesinCentralandEasternEurope:itcausedGermanbankerstopostponetherepaymentofforeigndebtsinordertoprotectthemselves,anditalsoendangeredtheUnitedKingdom,whichhasalargeinvestmentinGermany.banker.Theshortageofcapital,inallindustrializedcountries,hasbroughtaboutasharpdropinexportsanddomesticconsumption:nomarketwillinevitablyclosefactories,andthelessgoods,thelessgoodswillbetransported.Thiswillinevitablyendangertheshippingindustryandshipbuilding.Industry.Inallcountries,theconsequenceoftherecessionismassunemployment:13.7millionintheUnitedStates,5.6millioninGermany,and2.8millionintheUnitedKingdom(thelargestfigurein1932).TheGreatDepressionalsohadasignificantimpactonLatinAmerica,whichcausedthelossofforeigncapitalandmerchandiseexportsinaregionalmostcompletelydominatedbyEuropeanandAmericanbankers,merchantsandentrepreneurs.

Large-scaleunemploymenthasgreatlyreducedthelivingstandardsofvariouscountries.EveninthewealthiestAmerica,thereiswidespreadsufferingandpoverty,especiallyintheearlystages,whensomeunderfundedprivateinstitutionsandlocalinstitutionswereentrustedwiththeresponsibilityforrelief.InGermany,becauseofthehigherunemploymentrate,frustrationandtensionhavebecomemoreacute.AndthisfinallymadeHitler'ssuccesspossible,becausesuchalarge-scalesocialchaoswillinevitablyhaveaprofoundpoliticalimpact.

Internationalinfluence

TheBritishForeignSecretarySirAustinChamberlaincomparedtheinternationalsituationin1932withtheinternationalsituationintheLocarnoera:

Ihavelookedattheworldtodayandcomparedthecurrentsituationwiththesituationbackthen.Ihavetoadmitthatforsomereason,duetosomethingdifficulttopinpoint,theworldisgoingbackwardsinthepasttwoyears.Thecountriesarenotgettingclosertoeachother,noraretheyincreasingthedegreeoffriendship,noraretheymovingtowardsstablepeace,buttheyareadoptingattitudesofsuspicion,fear,andthreatsthatendangerworldpeace.

The"something"Chamberlaincan'tdetermineistheGreatDepressionanditsvariousinternationalanddomesticinfluences.ThevariousinternationalagreementsoftheLocarnoera,especiallytheinternationalagreementsonreparationsandwardebts,havebecomeimpossibletoimplement.Soonitbecameobvious;governmentsareonthebrinkofcollapseduetodecliningeconomiesandincreasingunemployment,andtheyarenolongerabletofulfillthepromisestheymadeafewyearsago.

Anothereffectoftheeconomicstormistodeveloplocaleconomicnationalismtotheextentthatithindersinternationalrelations.Inthetideoftotalcollapse,countries’self-defensemeasureshavetakentheformofhighertariffs,stricterimportquotas,settlementagreements,currencycontrolregulations,andbilateraltradeagreements.Thesemeasureswillinevitablycauseeconomicfrictionsandpoliticaltensionsbetweencountries.Variousattemptshavebeenmadetochangethistrend,butnoneofthemsucceeded.TheWorldEconomicConferenceheldinLondonin1933wasaterrifyingfailure."Economicindependence",thatis,economicself-sufficiency,hasgraduallybecomeagenerallyrecognizednationalgoal.

Closelyrelatedtothisisthegradualcessationofattemptstoreducearmaments,givingwaytovariouslarge-scalereorganizationplans.TheDisarmamentConference,whichbeganinAugust1932,washeldintermittentlyfor20months,butitwasasineffectiveastheeconomicconference.Withthegradualpassingofthe1930s,countrieshaveusedmoreandmorepowertoreorganizetheirarmaments.Factshaveprovedthatthistrendisimpossibletostop,becausearmsmanufacturingnotonlyprovidesimaginarysecurity,butalsoprovidesemploymentopportunities.Forexample,thenumberofunemployedpeopleintheUnitedStatesdidnotsignificantlydecreaseuntilitbegantoreorganizeitsarmamentsontheeveofWorldWarII.Inthesameway,Hitlerquicklysolvedtheunprecedentedunemploymentproblemhefacedbyimplementingahugere-armsplan.

Theweaponsandequipmentthatareaccumulatingatthistimewillinevitablybeusedsoonerorlater,butthereisstillsomereasontousethem;"livingspace"isthemostobviousreason.ThisisanewtermcreatedbyHitler,andItalianMussoliniandJapanesemilitaryleadersalsousedsimilarstatementsandarguments.Accordingtothistheory,unemploymentandwidespreadsufferingarecausedbythelackoflivingspace.Afewluckycountrieshaveseizedallcoloniesandsparselypopulatedoverseasterritories,leavingothercountrieswithoutthenaturalresourcesnecessarytosustaintheirpeople.Theobviouswayoutisexpansion,andforcecanbeusedwhennecessarytocorrectinjusticessufferedinthepast.Thisistheargumentusedbyso-called"poor"countriesagainst"rich"countries.

InadditiontodestroyingGermany,Italy,andJapan,theGreatDepressionalsodestroyedtheUnitedStates,Canada,andtheUnitedKingdomimpartially.Judgingfromthisfact,theaboveassertionisobviouslyspecious.However,theideaof​​livingspacehasplayedaroleinunitingthepeopleof"poor"countriestosupporttheexpansionistpoliciesoftheirrespectivegovernments.Italsoprovidesanapparentlymoraljustificationforaggressionthatpubliclydeclaresthatitspurposeistoprovidefoodforthepoorandjobsfortheunemployed.

ThisisthecombinationofthevariousforcesthatcausedChamberlain's"suspicion","fear"and"regression"in1932.Inthefollowingyears,theseforcescompletelydestroyedthereconciliationreachedinthe1920s,contributedtoonecrisisafteranother,andultimatelyledtotheSecondWorldWar.