Aadishesh/ncerts · Datasets at Hugging Face

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goods seemed to create a cycle of higher employment
and incomes, rising consumption demand, more investment, andyet more employment and incomes.
In 1923, the US resumed exporting capital to the rest of the world
and became the largest overseas lender. US imports and capitalexports also boosted European recovery and world trade and
income growth over the next six years.
All this, however, proved too good to last. By 1929 the world
would be plunged into a depression such as it had never
experienced before.
3.4 The Great Depression
The Great Depression began around 1929 and lasted till the mid-1930s. During this period most parts of the world experienced
catastrophic declines in production, employment, incomes andtrade. The exact timing and impact of the depression varied
across countries. But in general, agricultural regions and communities
were the worst affected. This was because the fallin agricultural prices was greater and more prolonged than that
in the prices of industrial goods.
The depression was caused by a combination of several factors. We
have already seen how fragile the post-war world economy was.
First: agricultural overproduction remained a problem. This was
made worse by falling agricultural prices. As prices slumped andagricultural incomes declined, farmers tried to expand production
and bring a larger volume of produce to the market to maintain
their overall income. This worsened the glut in the market, pushingdown prices even further. Farm produce rotted for a lack of buyers.
Second: in the mid-1920s, many countries financed their investments
through loans from the US. While it was often extremely easy toraise loans in the US when the going was good, US overseas lenders
panicked at the first sign of trouble. In the first half of 1928, USMany years later, Dorothea Lange, the
photographer who shot this picture, recollectedthe moment of her encounter with thehungry mother:
‘I saw and approached the hungry and desperate
mother, as if drawn by a magnet … I did not askher name or her history. She told me her age,that she was thirty-two. She said that they(i.e., she and her seven children) had been livingon frozen vegetables from the surrounding fields,and birds that the children killed … There shesat … with her children huddled around her,and seemed to know that my pictures mighthelp her, and so she helped me …’
From:
Popular Photography , February 1960.Box 3
Fig. 22 – Migrant agricultural worker’s family,
homeless and hungry, during the Great
Depression, 1936. Courtesy: Library of Congress,
Prints and Photographs Division.
India and the Contemporary World
96overseas loans amounted to over $ 1 billion. A year later it was one
quarter of that amount. Countries that depended crucially on USloans now faced an acute crisis.
The withdrawal of US loans affected much of the rest of the world,
though in different ways. In Europe it led to the failure of somemajor banks and the collapse of currencies such as the British pound
sterling. In Latin America and elsewhere it intensified the slump
in agricultural and raw material prices. The US attempt to protectits economy in the depression by doubling import duties also dealt
another severe blow to world trade.
The US was also the industrial country most severely affected by
the depression. With the fall in prices and the prospect of a
depression, US banks had also slashed domestic lending and
called back loans. Farms could not sell their harvests, householdswere ruined, and businesses collapsed. Faced with falling
incomes, many households in the US could not repay what they had
borrowed, and were forced to give up their homes, cars and otherconsumer durables. The consumerist prosperity of the 1920s now
disappeared in a puff of dust. As unemployment soared, people
trudged long distances looking for any work they could find.Ultimately, the US banking system itself collapsed. Unable to
recover investments, collect loans and repay depositors, thousands
of banks went bankrupt and were forced to close. The numbersare phenomenal: by 1933 over 4,000 banks had closed and
between 1929 and 1932 about 110, 000 companies had collapsed.
By 1935, a modest economic recovery was under way in most
industrial countries. But the Great Depression’s wider effects on
society, politics and international relations, and on peoples’ minds,
proved more enduring.
3.5 India and the Great Depression
If we look at the impact of the depression on India we realisehow integrated the global economy had become by the earlytwentieth century. The tremors of a crisis in one part of the world
were quickly relayed to other parts, affecting lives, economies and
societies worldwide.
In the nineteenth century, as you have seen, colonial India had become
an exporter of agricultural goods and importer of manufactures.
The depression immediately affected Indian trade. India’s exportsFig. 23 – People lining up for unemployment
benefits, US, photograph by Dorothea Lange,
1938. Courtesy: Library of Congress, Prints and
Photographs Division.When an unemployment census showed10 million people out of work, the localgovernment in many US states began makingsmall allowances to the unemployed. These longqueues came to symbolise the poverty andunemployment of the depression years .
97
The Making of a Global Worldgrow more jute, brothers, with the hope of greater cash.
Costs and debts of jute will make your hopes get dashed.
When you have spent all your money and got the crop off the ground,… traders, sitting at home, will pay only Rs 5 a maund.and imports nearly halved between 1928 and 1934. As international
prices crashed, prices in India also plunged. Between 1928 and 1934,wheat prices in India fell by 50 per cent.
Peasants and farmers suffered more than urban dwellers. Though
agricultural prices fell sharply, the colonial government refused toreduce revenue demands. Peasants producing for the world market
were the worst hit.
Consider the jute producers of Bengal. They grew raw jute that was
processed in factories for export in the form of gunny bags. But
as gunny exports collapsed, the price of raw jute crashed more than
60 per cent. Peasants who borrowed in the hope of better times orto increase output in the hope of higher incomes faced ever lower
prices, and fell deeper and deeper into debt. Thus the Bengal jute
growers’ lament:
Across India, peasants’ indebtedness increased. They used up their
savings, mortgaged lands, and sold whatever jewellery and preciousmetals they had to meet their expenses. In these depression years,
India became an exporter of precious metals, notably gold.
The famous economist John Maynard Keynes thought that Indiangold exports promoted global economic recovery. They certainly
helped speed up Britain’s recovery, but did little for the Indian peasant.
Rural India was thus seething with unrest when Mahatma Gandhilaunched the civil disobedience movement at the height of the
depression in 1931.
The depression proved less grim for urban India. Because of falling
prices, those with fixed incomes – say town-dwelling landowners
who received rents and middle-class salaried employees – now found
themselves better off. Everything cost less. Industrial investment alsogrew as the government extended tariff protection to industries,
under the pressure of nationalist opinion.Who profits from jute cultivation according to the
jute growers’ lament? Explain.DiscussIndia and the Contemporary World
984 Rebuilding a World Economy: The Post-war Era
The Second World War broke out a mere two decades after the
end of the First World War. It was fought between the Axis powers(mainly Nazi Germany, Japan and Italy) and the Allies (Britain,France, the Soviet Union and the US). It was a war waged for sixyears on many fronts, in many places, over land, on sea, in the air.
Once again death and destruction was enormous. At least 60 million
people, or about 3 per cent of the world’s 1939 population, arebelieved to have been killed, directly or indirectly, as a result of thewar. Millions more were injured.
Unlike in earlier wars, most of these deaths took place outside the
battlefields. Many more civilians than soldiers died from war-relatedcauses. Vast parts of Europe and Asia were devastated, and severalcities were destroyed by aerial bombardment or relentlessartillery attacks. The war caused an immense amount of economicdevastation and social disruption. Reconstruction promised tobe long and difficult.
Two crucial influences shaped post-war

goods seemed to create a cycle of higher employment

and incomes, rising consumption demand, more investment, andyet more employment and incomes.

In 1923, the US resumed exporting capital to the rest of the world

and became the largest overseas lender. US imports and capitalexports also boosted European recovery and world trade and

income growth over the next six years.

All this, however, proved too good to last. By 1929 the world

would be plunged into a depression such as it had never

experienced before.

3.4 The Great Depression

The Great Depression began around 1929 and lasted till the mid-1930s. During this period most parts of the world experienced

catastrophic declines in production, employment, incomes andtrade. The exact timing and impact of the depression varied

across countries. But in general, agricultural regions and communities

were the worst affected. This was because the fallin agricultural prices was greater and more prolonged than that

in the prices of industrial goods.

The depression was caused by a combination of several factors. We

have already seen how fragile the post-war world economy was.

First: agricultural overproduction remained a problem. This was

made worse by falling agricultural prices. As prices slumped andagricultural incomes declined, farmers tried to expand production

and bring a larger volume of produce to the market to maintain

their overall income. This worsened the glut in the market, pushingdown prices even further. Farm produce rotted for a lack of buyers.

Second: in the mid-1920s, many countries financed their investments

through loans from the US. While it was often extremely easy toraise loans in the US when the going was good, US overseas lenders

panicked at the first sign of trouble. In the first half of 1928, USMany years later, Dorothea Lange, the

photographer who shot this picture, recollectedthe moment of her encounter with thehungry mother:

‘I saw and approached the hungry and desperate

mother, as if drawn by a magnet … I did not askher name or her history. She told me her age,that she was thirty-two. She said that they(i.e., she and her seven children) had been livingon frozen vegetables from the surrounding fields,and birds that the children killed … There shesat … with her children huddled around her,and seemed to know that my pictures mighthelp her, and so she helped me …’

From:

Popular Photography , February 1960.Box 3

Fig. 22 – Migrant agricultural worker’s family,

homeless and hungry, during the Great

Depression, 1936. Courtesy: Library of Congress,

Prints and Photographs Division.

India and the Contemporary World

96overseas loans amounted to over $ 1 billion. A year later it was one

quarter of that amount. Countries that depended crucially on USloans now faced an acute crisis.

The withdrawal of US loans affected much of the rest of the world,

though in different ways. In Europe it led to the failure of somemajor banks and the collapse of currencies such as the British pound

sterling. In Latin America and elsewhere it intensified the slump

in agricultural and raw material prices. The US attempt to protectits economy in the depression by doubling import duties also dealt

another severe blow to world trade.

The US was also the industrial country most severely affected by

the depression. With the fall in prices and the prospect of a

depression, US banks had also slashed domestic lending and

called back loans. Farms could not sell their harvests, householdswere ruined, and businesses collapsed. Faced with falling

incomes, many households in the US could not repay what they had

borrowed, and were forced to give up their homes, cars and otherconsumer durables. The consumerist prosperity of the 1920s now

disappeared in a puff of dust. As unemployment soared, people

trudged long distances looking for any work they could find.Ultimately, the US banking system itself collapsed. Unable to

recover investments, collect loans and repay depositors, thousands

of banks went bankrupt and were forced to close. The numbersare phenomenal: by 1933 over 4,000 banks had closed and

between 1929 and 1932 about 110, 000 companies had collapsed.

By 1935, a modest economic recovery was under way in most

industrial countries. But the Great Depression’s wider effects on

society, politics and international relations, and on peoples’ minds,

proved more enduring.

3.5 India and the Great Depression

If we look at the impact of the depression on India we realisehow integrated the global economy had become by the earlytwentieth century. The tremors of a crisis in one part of the world

were quickly relayed to other parts, affecting lives, economies and

societies worldwide.

In the nineteenth century, as you have seen, colonial India had become

an exporter of agricultural goods and importer of manufactures.

The depression immediately affected Indian trade. India’s exportsFig. 23 – People lining up for unemployment

benefits, US, photograph by Dorothea Lange,

1938. Courtesy: Library of Congress, Prints and

Photographs Division.When an unemployment census showed10 million people out of work, the localgovernment in many US states began makingsmall allowances to the unemployed. These longqueues came to symbolise the poverty andunemployment of the depression years .

97

The Making of a Global Worldgrow more jute, brothers, with the hope of greater cash.

Costs and debts of jute will make your hopes get dashed.

When you have spent all your money and got the crop off the ground,… traders, sitting at home, will pay only Rs 5 a maund.and imports nearly halved between 1928 and 1934. As international

prices crashed, prices in India also plunged. Between 1928 and 1934,wheat prices in India fell by 50 per cent.

Peasants and farmers suffered more than urban dwellers. Though

agricultural prices fell sharply, the colonial government refused toreduce revenue demands. Peasants producing for the world market

were the worst hit.

Consider the jute producers of Bengal. They grew raw jute that was

processed in factories for export in the form of gunny bags. But

as gunny exports collapsed, the price of raw jute crashed more than

60 per cent. Peasants who borrowed in the hope of better times orto increase output in the hope of higher incomes faced ever lower

prices, and fell deeper and deeper into debt. Thus the Bengal jute

growers’ lament:

Across India, peasants’ indebtedness increased. They used up their

savings, mortgaged lands, and sold whatever jewellery and preciousmetals they had to meet their expenses. In these depression years,

India became an exporter of precious metals, notably gold.

The famous economist John Maynard Keynes thought that Indiangold exports promoted global economic recovery. They certainly

helped speed up Britain’s recovery, but did little for the Indian peasant.

Rural India was thus seething with unrest when Mahatma Gandhilaunched the civil disobedience movement at the height of the

depression in 1931.

The depression proved less grim for urban India. Because of falling

prices, those with fixed incomes – say town-dwelling landowners

who received rents and middle-class salaried employees – now found

themselves better off. Everything cost less. Industrial investment alsogrew as the government extended tariff protection to industries,

under the pressure of nationalist opinion.Who profits from jute cultivation according to the

jute growers’ lament? Explain.DiscussIndia and the Contemporary World

984 Rebuilding a World Economy: The Post-war Era

The Second World War broke out a mere two decades after the

end of the First World War. It was fought between the Axis powers(mainly Nazi Germany, Japan and Italy) and the Allies (Britain,France, the Soviet Union and the US). It was a war waged for sixyears on many fronts, in many places, over land, on sea, in the air.

Once again death and destruction was enormous. At least 60 million

people, or about 3 per cent of the world’s 1939 population, arebelieved to have been killed, directly or indirectly, as a result of thewar. Millions more were injured.

Unlike in earlier wars, most of these deaths took place outside the

battlefields. Many more civilians than soldiers died from war-relatedcauses. Vast parts of Europe and Asia were devastated, and severalcities were destroyed by aerial bombardment or relentlessartillery attacks. The war caused an immense amount of economicdevastation and social disruption. Reconstruction promised tobe long and difficult.

Two crucial influences shaped post-war