"The newspapers were full of news about bankclosings, business failing, and people out of work...We were in debt with no way out" - Carmen Carter
In 1932 at least 200,000 young people and 25,000 families roamed through the country looking for food, clothing, shelter, and a job.
"I remember standing in the welfare line somewhere on Michigan Avenue where they were passing out sweaters for children" - Richard Waskin
"There was much hardship. Many people sold pencils on the street for 1 penny. Others were so devastated, they committed suicide by jumping out of windows of a skyscraper in New York City." - Thomas Johnston
On October 29, 1929, also known as "Black Tuesday," 16.4 million shares of stock were sold, compared to 4 to 8 million on a normal day.
"The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's."
Alan Greenspan, Gold and Economic Freedom, 1966.
Friday, December 5, 2008
Posted by Chris F. at 4:41 PM