The Great Depression
From 1929 to 1933, real output fell by about 30%.
From 1929 to 1933, unemployment rose from about 3% to about 25%.
From 1929 to 1933, the dollar deflated on average 10% per year.
From 1929 to 1933, the money supply fell by about 30%.
To put this in perspective we can look at another deflationary episode in American history.
From 1973 to 1975, real output fell by about 3.4%.
From 1973 to 1975, unemployment rose from around 4% to 9%.
In June in 1929 there were 25,300 banks in the U.S. Out of these thouands were mismanaged partly due to a lack of effective regluation. In the six years leading up to 1929, the crash and subsequent depression, on average two banks failed every day. For the six year period ending in 1932, they failed at three or more each day.
The loss of deposits, an estimated 25%, was nothing in comparison to the loss of confidence in the banks of 100%.
1922 1924 Hawley-Smoot
