Great Depression
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The Great Depression was the longest and deepest economic downturn of the twentieth century, beginning with the Wall Street crash of October 1929 and lasting in most countries until the late 1930s. Share prices in New York collapsed in the last week of October, wiping out small investors and destroying confidence; thousands of banks then failed, taking deposits with them, and the money supply contracted sharply in the United States. World trade fell by about a third after tariffs were raised, most sharply by the Smoot-Hawley Act of 1930, and the gold standard forced governments to defend their currencies instead of spending. In Germany unemployment reached six million and helped bring Hitler to power in 1933; in the United States Franklin Roosevelt's New Deal from 1933 created relief agencies, public works and financial regulation, though full recovery came only with the rearmament of the late 1930s. In Japan the crisis pushed the military towards expansion in Manchuria. Prices and wages fell together, and deflation made debts harder to repay. Agriculture was hit first and hardest, with prices for wheat, cotton and coffee collapsing. The depression discredited laissez-faire economics, expanded the role of the state in economic life and shaped the institutions created at Bretton Woods in 1944.