ABSTRACT
What were the underlying causes of the Great Depression of the 1930s? Where did it originate, and why was it so widespread, so deep, so long? Was it caused by real or monetary factors? There is no general agreement among economists and economic historians as to the answers to these questions. Practically every feature of the international economy in the 1920s can be argued to have contributed to the great slump, and some economists have, in fact, developed explanations of the depression which take account of such features: for example, the instability of the gold exchange standard,1 the troubles of primary producers,2 or the dislocations resulting from World War I, including the trend towards increased protection evident in the post-1918 period.3 Other economists, however, believe that the origins of the world economic crisis which began in 1929 are to be found in the United States, which, by reducing its capital exports and imports of goods, placed an impossible strain, directly and indirectly, upon the international economy. Indeed, given the sheer economic weight of the United States economy in 1929, representing as it did more than half the industrial world, and the impact it was bound to have because of this on world prices, and through prices on world investment, it is difficult to argue that the depression was somehow forced on the United States by the rest of the world. Consequently, while no one has yet tried systematically to prove that the Great Depression did in fact originate in the United States, even those economists who seek further afield for an explanation of the world slump, concede the overwhelming economic importance of the United States in the world economy at the time.4
