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Topic: History
Number of pages / Number of words: 12 / 3136
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The higher interest rates discouraged conversion of interest-bearing deposits into gold and bolstered confidence that inflation would not break the commitment to gold.

2. Economic policy. Apart from the gold standard, economic policy barely existed. There was little belief that governments could, or should, prevent business slumps...


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These were seen as natural, therapeutic, and self-correcting. The lower wages and interest rates caused by slumps would spur recovery. The 1920-21 downturn (when industrial production fell 25 percent) had preceded the prosperous twenties. "People will work harder, live a more moral life," Andrew Mellon, Treasury secretary under President Herbert Hoover, said after the depression started...


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