34: 1931 Continued—England’s Abandonment of the Gold Standard
Chapter 34
1931 Continued—England’s Abandonment of the Gold Standard
First Austria, then Germany, then England—each in turn was tested and each in turn yielded. Austria and Germany each made a strenuous fight. Both had to contend with the political fears of France and with a divided attitude on the part of the outside world. England, although supported by ready cooperation on the part of New York and Paris, and by great forbearance in Amsterdam and other minor financial centers, made no fight at all.
35: The Year 1931 Continued—The First Foreign Run on the Gold of the United States
Chapter 35
The Year 1931 Continued—The First Foreign Run on the Gold of the United States
First Austria, then Germany, then England went under. The Germans did not surrender the nominal gold parity of the mark. Rather, the government blocked payments and took control of foreign exchange transactions, limiting drastically the volume of mark exchange that could be offered on the markets. The British, leaving the exchanges free, frankly abandoned the gold standard, and the pound dropped drastically on the foreign exchange markets.
36: The Year 1932
Chapter 36
The Year 1932
Slaughter in Security Prices, September, 1931-July, 1932, The period from September, 1931 to midsummer, 1932 was one of deep gloom. Securities of all kinds tumbled. The stock market moved down drastically. Standard & Poor’s common stocks index (1935-1939 = 100), which had stood at the average price of 103.7 for the month of July, 1931, dropped to 61 as the average for December, and to 35.9 as the average for June, 1932.
37: The Upturn in the Summer of 1932—Five Favorable Developments
Chapter 37
The Upturn in the Summer of 1932—Five Favorable Developments
Five favorable things came together in June and July of 1932 to reverse the long down trend in industry, in farm prices, in stock prices, and in business and financial confidence.
38: The Impact of Politics on the 1932 Revival
Chapter 38
The Impact of Politics on the 1932 Revival
The summer of 1932 was the turning point for the world as a whole. It was the turning point for Great Britain, for Canada, and for most of Continental Europe, and for much of Latin America. It proved not to be for the United States. We were to have one more heavy shock. The reasons for this were primarily political.
39: The Banking Holiday
Chapter 39
The Banking Holiday
Banking troubles had quieted down after the clearing up of the Chicago situation in the summer of 1932. Money in circulation had ceased to rise after the summer of 1932 and had even gone down a little, returning to the banks, improving their condition.
40: The Intergovernmental Debts
Chapter 40
The Intergovernmental Debts
The legacy of World War I in the form of vast reparations debts and vast Inter-Allied debts proved to be one of the major causes of the failure to restore a sound economic equilibrium in the 1920’s, and one of the major causes of the breakdown of international credit in 1931 and 1932. The reparations problem we have discussed in our chapters dealing with Germany. References have been made from time to time to the Inter-Allied debts.
Part IV: The New Deal In Maturity, 1933-1939
41: “My Father Also Chastised You with Whips, But I Will Chastise You with Scorpions
Chapter 41
“My Father Also Chastised You with Whips, But I Will Chastise You with Scorpions
When Solomon died Rehoboam ruled in his stead. Solomon had laid heavy burdens upon the people, and the people petitioned Rehoboam for a lighter yoke.
42: The Reopening of the Banks
Chapter 42
The Reopening of the Banks
Reopening Well Handled by Administration. On the whole, the reopening of the banks was well handled by the Administration. The proclamation closing all banks for a few days, which the President issued on the morning of Monday, March 6, two days after the inauguration, declared a four-day holiday from Monday, March 6, to Thursday, March 9, inclusive. It was designed to give time to study the situation. Authority for the issuance of the proclamation was claimed under a wartime statute of 1917.
