SESSION 5B: THE GREAT DEPRESSION???BANKING The Speed of Bank Liquidation and the Propagation of the U.S. Great Depression

The COVID-19 pandemic and the mitigation efforts put in place to contain it delivered the most severe blow to the U.S. economy since the Great Depression. In this paper, we argue that the Federal Reserve acted decisively and with dispatch to deploy all the tools in its conventional kit and to design, develop, and launch within weeks a series of innovative facilities to support the flow of credit to households and businesses. These measures, taken together, provided crucial support to the economy in 2020 and are continuing to contribute to what is expected to be a robust economic recovery in 2021.

Download Full-text

The Founding of the Federal Reserve, the Great Depression, and the Evolution of the U.S. Interbank Network

The Journal of Economic History ◽

10.1017/s0022050719000792 ◽

2019 ◽

Vol 80 (1) ◽

pp. 69-99 ◽

Cited By ~ 1

Author(s):

Matthew Jaremski ◽

David C. Wheelock

Keyword(s):

Great Depression ◽

Federal Reserve ◽

Systemic Risk ◽

Important Determinant ◽

Survival Rates ◽

Financial Network ◽

The Great Depression ◽

Key Events ◽

The U.S ◽

Over Time

Financial network structure is an important determinant of systemic risk. This article examines how the U.S. interbank network evolved over a long and important period that included two key events: the founding of the Federal Reserve and the Great Depression. Banks established connections to correspondents that joined the Federal Reserve in cities with Fed offices, initially reducing overall network concentration. The network became even more focused on Fed cities during the Depression, as survival rates were higher for banks with more existing connections to Fed cities, and as survivors established new connections to those cities over time.

Download Full-text

The End of the Project, 1939–1940

They Should Stay There ◽

10.5149/northcarolina/9781469634265.003.0009 ◽

2017 ◽

Author(s):

Alanís Enciso Fernando Saúl ◽

Russ Davidson

Keyword(s):

United States ◽

Great Depression ◽

The United States ◽

The Great Depression ◽

War Effort ◽

The Impact ◽

The U.S

This chapter concludes Enciso’s exploration of the Mexican government’s attempts to repatriate its citizens, as well as its 1939 decision to end its official plan for organized repatriation. This chapter also explores how the official end of the repatriation plan impacted immigration and deportation measures in the U.S., as well as how the threat of a mass deportation once again spurred the Cardenas administration to announce plans to repatriate 1,000 Mexican nationals each month. Chapter 8 also notes the impact that the United States’ war effort had on migration and repatriation levels, as well as concludes that the Mexican government’s struggle to successfully repatriate its citizens during the Great Depression has greatly impacted the attitude and policies of both Mexico and the U.S. concerning immigration today.

Download Full-text

Working with the New Deal from Colorado, 1933–1934

Relentless Reformer ◽

10.23943/princeton/9780691122731.003.0010 ◽

2014 ◽

Author(s):

Robyn Muncy

Keyword(s):

Twentieth Century ◽

Progressive Era ◽

Great Depression ◽

New Deal ◽

Rocky Mountain ◽

Economic Planning ◽

National Government ◽

The Great Depression ◽

The New Deal ◽

The U.S

This chapter details events in Josephine Roche's life from 1933 to 1934. Roche's experience at Rocky Mountain Fuel primed her for the New Deal. As Franklin Roosevelt's administration began to grapple in 1933 with the devastation caused by the Great Depression, Roche was asked to serve in several capacities. Early on, the most important was in the National Recovery Administration, an attempt to stabilize the U.S. economy through industry-wide economic planning. Shortly after that, Roche broke through yet another gender barrier by running for governor of Colorado. She took this bold step because the sitting state executive refused to cooperate with the relief programs of the New Deal, and Roche wanted Colorado effectively linked with the national government. She did not succeed, but her gubernatorial bid was nevertheless significant. It demonstrated both the centralizing force that Washington exerted through the New Deal and some of the bases for resistance. It also drew a direct line between progressivism in the early twentieth century and progressivism in the New Deal, highlighting a range of tactics for diminishing inequality that New Dealers brought straight from the Progressive Era into the 1930s.

Download Full-text

Taming the Megabanks

10.1093/oso/9780190260705.001.0001 ◽

2020 ◽

Author(s):

Arthur E. Wilmarth Jr.

Keyword(s):

Great Depression ◽

Great Recession ◽

Financial System ◽

The European Union ◽

The Great Recession ◽

Shadow Banks ◽

The Great Depression ◽

Securities Activities ◽

Credit Boom ◽

The U.S

This book demonstrates that universal banks—which accept deposits, make loans, and engage in securities activities—played central roles in precipitating the Great Depression of the early 1930s and the Great Recession of 2007–09. Universal banks promoted a dangerous credit boom and a hazardous stock market bubble in the U.S. during the 1920s, which led to the Great Depression. Congress responded by passing the Glass-Steagall Act of 1933, which separated banks from the securities markets and prohibited nonbanks from accepting deposits. Glass-Steagall’s structural separation of the banking, securities, and insurance sectors prevented financial panics from spreading across the U.S. financial system for more than four decades. Despite Glass-Steagall’s success, large U.S. banks pursued a twenty-year campaign to remove the statute’s prudential buffers. Regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, and Congress repealed Glass-Steagall in 1999. The United Kingdom and the European Union adopted similar deregulatory measures, thereby allowing universal banks to dominate financial markets on both sides of the Atlantic. In addition, large U.S. securities firms became “shadow banks” as regulators allowed them to issue short-term deposit substitutes to finance long-term loans and investments. Universal banks and shadow banks fueled a toxic subprime credit boom in the U.S., U.K., and Europe during the 2000s, which led to the Great Recession. Limited reforms after the Great Recession have not broken up universal banks and shadow banks, thereby leaving in place a financial system that is prone to excessive risk-taking and vulnerable to contagious panics. A new Glass-Steagall Act is urgently needed to restore a financial system that is less risky, more stable and resilient, and better able to serve the needs of our economy and society.

Download Full-text

Bylines in Despair: Herbert Hoover, the Great Depression, and the U.S. News Media.

Journal of American History ◽

10.2307/2082354 ◽

1995 ◽

Vol 82 (2) ◽

pp. 805

Author(s):

Betty Houchin Winfield ◽

Louis W. Liebovich

Keyword(s):

Great Depression ◽

News Media ◽

The Great Depression ◽

The U.S

Download Full-text

Navigating the Turbulent Economic Waters of the 2007 Great Recession and the Crash of the Housing Market

Muma Business Review ◽

10.28945/3947 ◽

2018 ◽

Vol 2 ◽

pp. 001-019

Keyword(s):

Housing Market ◽

Great Depression ◽

Great Recession ◽

Economic Downturn ◽

Home Equity ◽

Economic Activities ◽

The Great Recession ◽

The Great Depression ◽

Economic Production ◽

The U.S

What triggered the crash of the U.S. housing market? This analysis looks at the economic and industry forces that led to an economic downturn that put as many as half of all U.S. residential builders out of business. Since the Great Depression, the U.S. housing market has significantly influenced economic production and employment levels. Direct and indirect investments in the housing industry, along with the induced economic activities such as real estate transactions and construction as well as other factors, accounted for an estimated 15-20% of GDP during boom years (CBPP, 2012). The burst of the $8 trillion housing bubble in 2007 and the subsequent collapse of the financial markets in 2008 created massive disarray in homebuilding (Bivens, 2011). As many as 50% of homebuilders closed their doors, either voluntarily or through bankruptcy filings (Quint, 2015). Concurrently, from 2006 through 2012, the Great Recession resulted in the loss of over $7 trillion of home equity (Gould Ellen, 2012). Over 24 percent of home mortgages went “underwater” with balances exceeding home values (Carter & Gottschalck, n.d.). For some homeowners, the unfortunate thought of losing their homes through foreclosure and incurring disruption to family life became a reality. The stress from threats of the loss of a home, unemployment, and depletion of savings exacted a great toll on many. Not since the Great Depression has the U.S. economy faced forces so devastating to the housing market and personal wealth.

Download Full-text

Haiti and the Bolshevik Revolution

10.5406/illinois/9780252041198.003.0003 ◽

2018 ◽

Author(s):

Gerald Horne

Keyword(s):

African Americans ◽

Great Depression ◽

Communist Party ◽

Left Wing ◽

Bolshevik Revolution ◽

The Great Depression ◽

The U.S

This chapter examines the U.S. occupation of Haiti and the Bolshevik Revolution. Claude Barnett was sufficiently insightful to realize that the U.S. occupation of Haiti, which had commenced in 1915 and was to last until 1934, was not in his or his class's interests. Moreover, as numerous African Americans moved leftward during this same period under the influence of the Bolshevik Revolution and the emergent U.S. Communist Party, Barnett—though a staunch Republican—demonstrated his flexibility by seeking to accommodate them too. Unlike some in his class, Barnett did not instinctively bow to either colonialism or anticommunism. Indeed, the racial and class interests of Barnett directed him toward anticolonialism and thus, in turn, led this Republican toward aligning with a growing left-wing influence among African Americans propelled by the intensified impoverishment brought by the Great Depression.

Download Full-text