Full Text

recession of 1937–8

Subject History

Place Northern America » United States of America

DOI: 10.1111/b.9781577180999.1997.x


In 1937 the Roosevelt administration attempted to balance the federal budget by curtailing public works and cutting relief employment programs, while the Federal Reserve limited credit and reduced the money supply to prevent a resurgence of inflation. These actions weakened the economy, which already suffered from a lack of business confidence, and a severe recession ensued after the stock market plunged steeply on 7 September 1937. Over the following nine months, manufacturing employment fell by almost a quarter, industrial output by a third, the stock market by half, and profits by over three-quarters. By June, as the economy began to revive, 4,000,000 workers had become jobless. A major reason for the upturn in business activity was a greater willingness to use budget deficits for economic stimulus ( see K eynesian economics ). ... log in or subscribe to read full text

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