The 1930s: Collapse and Revival

Abstract

The words are Sir Compton Mackenzie’s, and he does well to remind us that the Great Depression was not simply an economic catastrophe, but a political disaster as well. No depression before or since has struck with such intensity, spread its tentacles so wide, or had such profound and long-lasting effects. One side of the coin was falling prices, mass unemployment, and an avalanche of bankruptcies. The other side was the political response; a rise everywhere of beggar-my-neighbour policies of protective tariffs, trade quotas, currency depreciation, and debt defaults. If the curtain of depression began to lift in 1933 in some countries, and was lifting nearly everywhere by 1936, it was to reveal a very different world. Far from the pre-1914 ideals of free trade, the gold standard, and economic interdependence, which Britain had vainly tried to re-create in the 1920s, the 1930s was a period of economic nationalism, of low international investment, and low levels of world trade.

All your Managers can do is to keep up a brave front and be ready to meet whatever may befall with forethought and resolution.

(R. D. Holt to shareholders, February, 1930)

The volume of international trade in the year 1933 measured in terms of gold was hardly more than a third of its value in 1929. Those are the bare statistics of the great depression, but behind those statistics stand the want and misery and malaise which surrendered to the desperate remedy of war.¹