ABSTRACT
The financial crisis of 1931 was the consequence of a slump in world trade which had in part preceded, but which was aggravated by, a financial panic in New York at the end of 1929. The Labour Government was under great pressure. The Bank was urging immediate action to prevent national bankruptcy. The Opposition leaders were sternly demanding exactly what economies the Government had in mind, and twice insisted that its proposals were inadequate. The basic cause of the Great Depression was the maldistribution of the world's gold supply. It was, of course, normal that there should be an alternation of boom and slump in the operations of trade at a time when it was to a large extent unregulated by State control. The most serious repercussions of the financial crisis in New York were felt in Germany, whose economy, bearing in mind its liability for reparations, depended on foreign loans, which between 1924 and 1928 totalled £750 millions.
