The Great Depression
Short History Of...
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The Gold Standard and the Dust Bowl
The appeal of the gold standard was A, it prevents inflation. B, it makes foreign trade easier. The issue is that now, in 1931, Britain is in dire straits. In order to maintain confidence in the pound and keep it in line with the gold standard, the government has felt compelled to balance the budget by raising taxes and cutting spending. When worried customers look to cash in their investments and savings, the banks struggle to comply because they have invested it elsewhere. What follows is a stampede of panicked withdrawals. Quite simply, the banks run out of money. Those in the poorer south crumble first but the shockwaves travel all the way back to Wall Street.
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