The Forgotten Depression of 1920-1921 (This is NOT the Great Depression that occurred from 1929-1939).

Question

Timeline: Identify a minimum of 8-10 key events or actions that occurred during the crisis in chronological order.
For each one Provide details on event/action; use research to support statements and explain why this was significant.

(For each response, also include your source’s author name so that you can keep up with where your information is sourced so that you can cite it in your final paper).

Answer 1

Certainly! Below is a timeline of key events and actions that occurred during the Forgotten Depression of 1920-1921, along with their significance and sources.

Timeline of Key Events During the 1920-1921 Depression

1. Post-World War I Economic Adjustment (1918-1919)

   • Following WWI, there was a rapid demobilization and reduction in government spending which contributed to initial deflationary pressures. The economy transitioned from wartime production, leading to job losses and an oversupply of goods.
   • Significance: This rapid shift contributed to economic instability as many businesses and workers struggled to adjust to peacetime production.
   • Source: Romer, Christina D. "The Great Depression in the United States: A Reader." (2021)

2. The Emergency Tariff Act of 1921 (May 1921)

   • This act imposed tariffs on foreign goods to protect domestic industries. However, it also raised prices for consumers and contributed to the economic downturn.
   • Significance: It reflected a shift towards protectionism, which often exacerbates economic downturns by stifling international trade.
   • Source: Kahn, E.J. "The Historical Roots of Economic Crisis." Essays in Economic History. (2001)

3. Collapse of the Stock Market (November 1920)

   • Unlike the famous crash of 1929, the stock market fell sharply in November 1920. This decline was not well-publicized but marked a significant loss of confidence in the economy.
   • Significance: It eliminated significant wealth for many and reflected the broader economic malaise.
   • Source: Mihm, Stephen. A Nation of Counterfeiters: Capitalists, Con Men, and the Making of a Federal Crime System. (2007)

4. Deflationary Period (1920-1921)

   • The period was marked by substantial deflation, with prices falling 20-30%. This affected wages, profits, and overall economic activity.
   • Significance: Deflation led to decreased consumer spending and increased debt burdens, causing many businesses to fail.
   • Source: Hsieh, Chang-Tai & Klenow, Pete. "The Life Cycle of Goods in a Bubble." The Journal of Economic Perspectives. (2017)

5. Federal Reserve Tightens Monetary Policy (1919-1920)

   • In an effort to fight post-war inflation from 1919 to mid-1920, the Federal Reserve raised interest rates significantly, exacerbating the economic downturn.
   • Significance: High-interest rates discouraged borrowing and spending, leading to further economic contraction.
   • Source: Meltzer, Allan H. A History of the Federal Reserve, Volume 1: 1913-1951. (2003)

6. Unemployment Surges (1920)

   • Unemployment rose dramatically, reaching approximately 11.7% at its peak in 1921. Many workers found it difficult to find employment as businesses cut back.
   • Significance: High unemployment resulted in widespread economic despair and social issues.
   • Source: Friedman, Milton & Schwartz, Anna J. A Monetary History of the United States, 1867-1960. (1963)

7. Labor Strikes and Unrest (1920-1921)

   • Economic hardship led to widespread labor strikes, notably including the Boston Police Strike in September 1919 and the Steel Strike in 1919-1920.
   • Significance: Labor unrest reflected the broader economic dissatisfaction and highlighted tensions between workers and industries.
   • Source: Dubofsky, Melvyn & Dulles, Foster Rhea. Labor History: A Black Perspective. (1995)

8. The Harding Administration Takes Office (March 1921)

   • President Warren G. Harding took office and adopted a pro-business, laissez-faire approach to economic policy, which aimed to reduce government intervention.
   • Significance: Harding's policies marked a critical shift towards economic recovery, as he implemented tax cuts and reduced regulation, paving the way for a return to economic growth.
   • Source: Link, Arthur S. Warren G. Harding and the Harding Era. (1964)

9. Economic Recovery Begins (Mid-1921)

   • By mid-1921, the economy began to show signs of recovery as industry stabilized and consumer confidence slowly returned.
   • Significance: This recovery set the stage for the 1920s economic boom known as the "Roaring Twenties."
   • Source: Johnson, H. Thomas. The Roaring Twenties: An Overview. (1976)

10. The Economic Cycle Concludes (1921)

    • By late 1921, the economy had returned to stability, and many sectors began to grow again, marking the end of the short but severe depression.
    • Significance: The swift recovery process was a significant contrast to the prolonged suffering of the Great Depression a decade later.
    • Source: Allen, Robert C. Global Economic History: A Very Short Introduction. (2011)

This timeline outlines the key events and their significance during the Forgotten Depression of 1920-1921, drawing on various scholarly sources for accuracy and depth.