expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down 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 to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble. In the first half of , US Many years later, Dorothea Lange, the photographer who shot this picture, recollected the moment of her encounter with the hungry mother: ‘I saw and approached the hungry and desperate mother, as if drawn by a magnet … I did not ask her 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 living on frozen vegetables from the surrounding fields, and birds that the children killed … There she sat … with her children huddled around her, and seemed to know that my pictures might help her, and so she helped me …’ From: Popular Photography , February .
Box Fig. – Migrant agricultural worker’s family, homeless and hungry, during the Great Depression, . Courtesy: Library of Congress, Prints and Photographs Division. overseas loans amounted to over $ billion.
A year later it was one quarter of that amount. Countries that depended crucially on US loans 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 some major 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 protect its 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