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127-630: The first proposal for a railroad through Saugus came from a group led by George Peabody , who pushed for a railroad from East Boston to Salem over the Saugus marshes. The plan was opposed by Saugonians, as the owners of mills located on the Saugus River feared that a proposed drawbridge over the river would interfere with ships that loaded and unloaded cargo at their wharves. In 1836, the Massachusetts General Court granted

254-599: A Jacobethan style, were opened in Commercial Street , Spitalfields in February 1864. George Peabody provided benefactions of well over $ 8 million ($ 240,000,000 in 2023 dollars ), most of them in his lifetime. Some of the organizations which have been confirmed as recipients of Peabody's funds includ: Peabody died in London on November 4, 1869, aged 74, at the house of his friend Sir Curtis Lampson . At

381-634: A deflationary spiral started in 1931. Farmers faced a worse outlook; declining crop prices and a Great Plains drought crippled their economic outlook. At its peak, the Great Depression saw nearly 10% of all Great Plains farms change hands despite federal assistance. At first, the decline in the U.S. economy was the factor that triggered economic downturns in most other countries due to a decline in trade, capital movement, and global business confidence. Then, internal weaknesses or strengths in each country made conditions worse or better. For example,

508-418: A silver standard , almost avoided the depression entirely. The connection between leaving the gold standard as a strong predictor of that country's severity of its depression and the length of time of its recovery has been shown to be consistent for dozens of countries, including developing countries . This partly explains why the experience and length of the depression differed between regions and states around

635-519: A Fourth of July dinner when he chose to toast Queen Victoria before US President Franklin Pierce ; Pierce's future successor, James Buchanan , then Ambassador to London, left in a huff. At around this time, Peabody began to suffer from rheumatoid arthritis and gout . In February 1867, on one of several return visits to the United States, and at the height of his financial success, Peabody

762-531: A day. By the mid-1920s passenger service on the Saugus Branch decreased to twelve trips per day. The service declined even more during the Great Depression , with only three inbound trains and six outbound trains run. During World War II , use of the passenger service increased due to gasoline rationing. However, once the war was over, use once again declined. On July 29, 1948, B&M petitioned

889-509: A disciple of Benjamin Franklin , Peabody combined hard work with frugality, punctuality, and a strong public spirit. Peabody was a pioneer, whose success in philanthropy set a new standard for American millionaires. By contrast, philanthropy in Europe was more typically dispensed by aristocratic families with inherited landed wealth, which built palaces and museums that were eventually opened to

1016-604: A former privately run bank, bearing no relation to the U.S. government (not to be confused with the Federal Reserve ). Unable to pay out to all of its creditors, the bank failed. Among the 608 American banks that closed in November and December 1930, the Bank of United States accounted for a third of the total $ 550 million deposits lost and, with its closure, bank failures reached a critical mass. In an initial response to

1143-467: A greater reduction in credit. On 5 April 1933, President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates , coins and bullion illegal, reducing the pressure on Federal Reserve gold. British economist John Maynard Keynes argued in The General Theory of Employment, Interest and Money that lower aggregate expenditures in the economy contributed to

1270-586: A lack of funds. Eastern believed that this new route would cost it half of its revenues because it would provide direct access to Boston , which Eastern did not offer (Eastern patrons were to transfer to ferries at East Boston ). To overcome this challenge, Eastern's directors chose to purchase stock in the Saugus Branch Railroad Co. at the inflated price of $ 80 a share. On April 30, 1852, the Eastern Railroad Co. purchased all

1397-600: A modern industrial city handled shortages of money and resources. Often they updated strategies their mothers used when they were growing up in poor families. Cheap foods were used, such as soups, beans and noodles. They purchased the cheapest cuts of meat—sometimes even horse meat—and recycled the Sunday roast into sandwiches and soups. They sewed and patched clothing, traded with their neighbors for outgrown items, and made do with colder homes. New furniture and appliances were postponed until better days. Many women also worked outside

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1524-402: A monetary contraction first-hand were forced to join the deflationary policy since higher interest rates in countries that performed a deflationary policy led to a gold outflow in countries with lower interest rates. Under the gold standard's price–specie flow mechanism , countries that lost gold but nevertheless wanted to maintain the gold standard had to permit their money supply to decrease and

1651-439: A political slush fund to spread propaganda for debt resumption and elect legislators who would placate their investors. By means of a secret account, the two firms transferred a thousand sterling to Baltimore and even bribed Daniel Webster, the orator and statesman, to make speeches for debt repayment. Their attempts were successful: pro-resumption Whigs were elected and London bankers started to receive payments. Barings duplicated

1778-436: A prominent American financier in London, Peabody often faced scorn for America's poor credit. (On one occasion, he was even blackballed from membership in a gentlemen's club .) Peabody joined forces with Barings Bank to lobby American states for debt repayment, particularly his home state of Maryland. The campaign included printing propaganda and bribing clergy and politicians, most notably Senator Daniel Webster . Peabody made

1905-567: A serious issue in the 1930s. Support for increasing welfare programs during the depression included a focus on women in the family. The Conseil Supérieur de la Natalité campaigned for provisions enacted in the Code de la Famille (1939) that increased state assistance to families with children and required employers to protect the jobs of fathers, even if they were immigrants. In rural and small-town areas, women expanded their operation of vegetable gardens to include as much food production as possible. In

2032-463: A significant profit when Maryland, Pennsylvania, and other states resumed payments, having previously bought up state bonds at a low cost. Encyclopædia Britannica cites him as having "helped establish U.S. credit abroad." Peabody took Junius Spencer Morgan (father of J. P. Morgan ) into partnership in 1854 to form Peabody, Morgan & Co. , and the two financiers worked together until Peabody's retirement in 1864; Morgan had effective control of

2159-480: A small cadre of Labour, but the vast majority of Labour leaders denounced MacDonald as a traitor for leading the new government. Britain went off the gold standard , and suffered relatively less than other major countries in the Great Depression. In the 1931 British election, the Labour Party was virtually destroyed, leaving MacDonald as prime minister for a largely Conservative coalition. In most countries of

2286-713: A standstill agreement froze Germany's foreign liabilities for six months. Germany received emergency funding from private banks in New York as well as the Bank of International Settlements and the Bank of England. The funding only slowed the process. Industrial failures began in Germany, a major bank closed in July and a two-day holiday for all German banks was declared. Business failures were more frequent in July, and spread to Romania and Hungary. The crisis continued to get worse in Germany, bringing political upheaval that finally led to

2413-658: Is a consensus that the Federal Reserve System should have cut short the process of monetary deflation and banking collapse, by expanding the money supply and acting as lender of last resort . If they had done this, the economic downturn would have been far less severe and much shorter. Modern mainstream economists see the reasons in Insufficient spending, the money supply reduction, and debt on margin led to falling prices and further bankruptcies ( Irving Fisher 's debt deflation). The monetarist explanation

2540-605: Is curvy; it would require 15 to 20 extra minutes for commuter trains to travel, leaving them no longer time-competitive with driving. The section of the Newburyport/Rockport Line south of Salem is one of the busiest segments of mainline railroad in Massachusetts; diverting as many as 60 trains per day would pose significant environmental, social, and physical impacts to the communities along the Saugus Branch. Additionally, encroachment since 1958 would make

2667-493: Is supported by the contrast in how the crisis progressed in, e.g., Britain, Argentina and Brazil, all of which devalued their currencies early and returned to normal patterns of growth relatively rapidly and countries which stuck to the gold standard , such as France or Belgium. Frantic attempts by individual countries to shore up their economies through protectionist policies – such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries – exacerbated

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2794-539: The 1932 election , Hoover was defeated by Franklin D. Roosevelt , who from 1933 pursued a series of " New Deal " policies and programs to provide relief and create jobs, including the Civilian Conservation Corps , Federal Emergency Relief Administration , Tennessee Valley Authority , and Works Progress Administration . Historians disagree on the effects of the New Deal, with some claiming that

2921-612: The Eastern Railroad a charter to build the Boston to Salem railroad. In an effort to tap into its competitor's market, the Boston & Maine Railroad petitioned the Massachusetts General Court in 1845 for a charter to build a railroad from Malden to Salem through Saugus, Lynnfield , and South Danvers . The plan was not approved. In 1846, Joshua Webster proposed a railroad line from Saugus to Malden that would connect with

3048-697: The Haymarket North Extension ). Included in the sale were also a number of branch lines no longer used for passenger service, including the Saugus Branch, to be landbanked for possible future service. The reactivation of the Saugus Branch was considered during the MBTA's North Shore Transit Improvements project in the 2000s, as reactivation would allow for the continued operation of MBTA Commuter Rail service as well as new rapid transit service between Revere and Salem. The North Shore Transit Improvements Project-Major Investment Study concluded that

3175-670: The Malden News described them as "the most mousey, dilapidated, antique stations to be found this side of the land of the Hottentots ". After passenger service was ended, the semaphore signals were removed and the stations were sold. The line was converted to a single-track operation and still used for freight until 1993. Hopper cars delivered road salt to the state's storage area in Revere. Occasional deliveries were made to Eastern Industrial Oil Products in Saugus. In 1968 and 1969,

3302-488: The Massachusetts Department of Public Utilities (D.P.U.) to discontinue all passenger service on the Saugus Branch. B&M reported that expenses for the Saugus Branch were $ 115,145 while annual passenger revenue was only $ 48,029. The D.P.U. rejected the petition on November 18, 1949, finding that the railroad did not show that there was a lack of public interest in maintaining the Saugus Branch. Although

3429-582: The New York Bank of United States – which produced panic and widespread runs on local banks, and the Federal Reserve sat idly by while banks collapsed. Friedman and Schwartz argued that, if the Fed had provided emergency lending to these key banks, or simply bought government bonds on the open market to provide liquidity and increase the quantity of money after the key banks fell, all the rest of

3556-703: The Peabody Hotel in Memphis, Tennessee , was named in his memory. A number of Elementary and High Schools in the United States are named after Peabody. A statue sculpted by William Wetmore Story stands next to the Royal Exchange in the City of London, unveiled by the Prince of Wales in July 1869: Peabody himself was too unwell to attend the ceremony, and died less than four months later. A replica of

3683-793: The Peabody Trust in Britain and the Peabody Institute and George Peabody Library in Baltimore , and was responsible for many other charitable initiatives. For his generosity, he was awarded the Congressional Gold Medal and made a Freeman of the City of London , among many other honors. Peabody was born in 1795 in what was then South Danvers (now Peabody ), Massachusetts. His family had Puritan ancestors in

3810-835: The Royal Navy , arriving at Portland, Maine , where they were received by US Admiral David Farragut . He was laid to rest in Harmony Grove Cemetery , in Salem, Massachusetts , on February 8, 1870. Peabody's death and the pair of funerals were international news, through the newly completed trans-Atlantic underwater telegraph cable . Hundreds of people participated in the ceremonies and thousands more attended or observed. Historian Roderick Nash argues that Peabody made his millions quietly in groceries and real estate, while contemporary millionaires were building more visible empires in oil, iron, land and especially railroads. As

3937-539: The coming to power of Hitler's Nazi regime in January 1933. The world financial crisis now began to overwhelm Britain; investors around the world started withdrawing their gold from London at the rate of £2.5 million per day. Credits of £25 million each from the Bank of France and the Federal Reserve Bank of New York and an issue of £15 million fiduciary note slowed, but did not reverse,

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4064-447: The 1937 recession that interrupted it). The common view among most economists is that Roosevelt's New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession. Some economists have also called attention to the positive effects from expectations of reflation and rising nominal interest rates that Roosevelt's words and actions portended. It

4191-823: The Anglo-American dinners he hosted in honor of American diplomats and other worthies, and in celebration of the Fourth of July . In 1851, when the US Congress refused to support the American section at the Great Exhibition at the Crystal Palace , Peabody advanced £ 3000 (then worth $ 15,000; worth about $ 550,000 in 2022 dollars) to improve the exhibit and uphold the reputation of the United States. In 1854, he offended many of his American guests at

4318-635: The B&;M's mainline to be blocked by firefighting equipment. To restore service to the North Shore , the B&M detoured its commuter service over the Saugus Branch. On December 27, 1976, the Massachusetts Bay Transportation Authority purchased the remaining B&M commuter assets, including rolling stock and the four active northside lines (save for the lower Haverhill Line , purchased three years earlier for

4445-559: The Boston & Maine Railroad in Malden. Eastern countered by proposing a line from Lynn to Saugus Center. In 1848 the legislature approved Webster's plan and granted his group a charter for the Saugus Branch Railroad Co. Before construction began, the route was extended to Lynn Common and altered to include the Saugus neighborhood of Sweetser's Corner (now known as Cliftondale) and the Malden neighborhood of East Malden (now known as Linden). Construction began in 1850, but dragged along due to

4572-758: The British crisis. The financial crisis now caused a major political crisis in Britain in August 1931. With deficits mounting, the bankers demanded a balanced budget; the divided cabinet of Prime Minister Ramsay MacDonald's Labour government agreed; it proposed to raise taxes, cut spending, and most controversially, to cut unemployment benefits 20%. The attack on welfare was unacceptable to the Labour movement. MacDonald wanted to resign, but King George V insisted he remain and form an all-party coalition " National Government ". The Conservative and Liberals parties signed on, along with

4699-590: The City of Peabody is now operated and preserved as the George Peabody House Museum , a museum dedicated to interpreting his life and legacy. There is a blue plaque on the house where he died in London, No. 80 Eaton Square , Belgravia , erected in 1976. On March 16, 2018, Google honored Peabody with a Google Doodle on the 151st anniversary of Peabody being awarded the Congressional Gold Medal. The mural reproduced in

4826-466: The DPU approved the B&M's petition. On May 16, 1958, the Saugus Branch saw its final scheduled passenger train. At the time, only 300 daily commuters used the two daily round trips. The Saugus Branch had seventeen stations; all but Everett Junction remained in service until 1958. The stations of the Saugus Branch were not considered to be architecturally significant or even physically attractive. In 1933,

4953-530: The Depression. Businessmen ignored the mounting national debt and heavy new taxes, redoubling their efforts for greater output to take advantage of generous government contracts. During World War I many countries suspended their gold standard in varying ways. There was high inflation from WWI, and in the 1920s in the Weimar Republic , Austria , and throughout Europe. In the late 1920s there

5080-521: The Dow returning to 294 (pre-depression levels) in April 1930, before steadily declining for years, to a low of 41 in 1932. At the beginning, governments and businesses spent more in the first half of 1930 than in the corresponding period of the previous year. On the other hand, consumers, many of whom suffered severe losses in the stock market the previous year, cut expenditures by 10%. In addition, beginning in

5207-489: The Federal Reserve did not act to limit the decline of the money supply was the gold standard . At that time, the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act , which required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit that could be backed by the gold in its possession. This credit

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5334-811: The Google Doodle is physically located within the lunchroom of the George Peabody Elementary School in San Francisco. The Georgetown Neighborhood Library in Washington, D.C. , houses the Peabody Room, named after the original neighborhood Peabody Library founded by Peabody. The Peabody Room contains historical information about the Georgetown neighborhood. Great Depression The Great Depression

5461-442: The Great Depression is right, or the traditional Keynesian explanation that a fall in autonomous spending, particularly investment, is the primary explanation for the onset of the Great Depression. Today there is also significant academic support for the debt deflation theory and the expectations hypothesis that – building on the monetary explanation of Milton Friedman and Anna Schwartz – add non-monetary explanations. There

5588-642: The Great Depression. According to the U.S. Senate website, the Smoot–Hawley Tariff Act is among the most catastrophic acts in congressional history. Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade. Most historians and economists blame the Act for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries. While foreign trade

5715-492: The Irishman Alexander Brown (founder of the venerable investment and banking firm of " Alex. Brown & Sons " in 1801), who managed their father's Liverpool office, opened in 1810. In 1837, Peabody took up residence in London, and the following year, he started a banking business trading on his own account. The banking firm of " George Peabody and Company " was not, however, established until 1851. It

5842-543: The Lynn and Saugus segments was not as affected. In 1919 the El was extended to Everett and the Saugus Branch was considered for the expansion from Everett to Malden. At a legislative hearing on the issue, the B&M opposed using the Saugus Branch because it had a freight load of 5,000 cars per year and the El wanted to purchase only the Malden segment, not the entire branch. In 1919, the number of passenger trips had fallen to sixteen

5969-481: The New Deal prolonged the Great Depression, as they argue that National Industrial Recovery Act of 1933 and National Labor Relations Act of 1935 restricted competition and established price fixing. John Maynard Keynes did not think that the New Deal under Roosevelt single-handedly ended the Great Depression: "It is, it seems, politically impossible for a capitalistic democracy to organize expenditure on

6096-731: The Saugus Branch . The Saugus Branch is mentioned in Samuel McChord Crothers ' By the Christmas Fire . [REDACTED] Media related to Saugus Branch Railroad at Wikimedia Commons George Peabody George Peabody (February 18, 1795 – November 4, 1869) was an American financier and philanthropist. He is often considered the father of modern philanthropy . Born into a poor family in Massachusetts , Peabody went into business in dry goods and later into banking. In 1837 he moved to London (which

6223-463: The Saugus Branch plan provided the MBTA with an option to accommodate a rapid transit system while preserving commuter rail service north of Salem, by rerouting commuter trains over the Saugus Branch and converting the Eastern Route mainline into a Blue Line branch at least as far as Lynn . However, the plan was deemed infeasible for several reasons. Unlike the Eastern Route, the Saugus Branch

6350-529: The Saugus Branch underwent improvements, including telegraphs for dispatching train orders and turning the line into a double track . During the 1890s, passenger service on the Saugus branch peaked. In 1893, there were 36 trips per day on the Saugus Branch. Use of the Saugus Branch in Malden slowly declined after the opening of the Boston Elevated Railway (also known as the El) in 1901. Business in

6477-488: The Saugus Branch, citing extensive losses. An Essex County -wide opposition movement formed as three hundred or so commuters still used the line. In December a formal hearing was held in which both sides presented their case. Saugus Town Moderator and Essex County Commissioner C. F. Nelson Pratt was the most forceful opponent of the change and hyperbolically stated during the hearing that area residents would be forced to use " dog sleds " for winter commuting. On April 18, 1958,

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6604-544: The U.K. economy, which experienced an economic downturn throughout most of the late 1920s, was less severely impacted by the shock of the depression than the U.S. By contrast, the German economy saw a similar decline in industrial output as that observed in the U.S. Some economic historians attribute the differences in the rates of recovery and relative severity of the economic decline to whether particular countries had been able to effectively devaluate their currencies or not. This

6731-490: The U.S. unemployment rate down below 10%. World War II had a dramatic effect on many parts of the American economy. Government-financed capital spending accounted for only 5% of the annual U.S. investment in industrial capital in 1940; by 1943, the government accounted for 67% of U.S. capital investment. The massive war spending doubled economic growth rates, either masking the effects of the Depression or essentially ending

6858-622: The United States, agricultural organizations sponsored programs to teach housewives how to optimize their gardens and to raise poultry for meat and eggs. Rural women made feed sack dresses and other items for themselves and their families and homes from feed sacks. In American cities, African American women quiltmakers enlarged their activities, promoted collaboration, and trained neophytes. Quilts were created for practical use from various inexpensive materials and increased social interaction for women and promoted camaraderie and personal fulfillment. Oral history provides evidence for how housewives in

6985-543: The United States, remained on the gold standard into 1932 or 1933, while a few countries in the so-called "gold bloc", led by France and including Poland, Belgium and Switzerland, stayed on the standard until 1935–36. According to later analysis, the earliness with which a country left the gold standard reliably predicted its economic recovery. For example, The UK and Scandinavia, which left the gold standard in 1931, recovered much earlier than France and Belgium, which remained on gold much longer. Countries such as China, which had

7112-578: The Wall Street crash, after which the slide continued for three years, which was accompanied by a loss of confidence in the financial system. By 1933, the U.S. unemployment rate had risen to 25 percent, about one-third of farmers had lost their land, and about half of the country's 25,000 banks had gone out of business. Many people, unable to pay mortgages or rent, became homeless and relied on begging or charities to feed themselves. The U.S. federal government initially did little to help. President Herbert Hoover , like many of his fellow Republicans , believed in

7239-453: The award. On March 16, 1867, he was awarded the United States Congressional Gold Medal , an honorary doctorate of laws by Harvard University , and an honorary doctorate in civil law by Oxford University . On March 24, 1867, Peabody was elected a member of the American Antiquarian Society Peabody's birthplace, South Danvers, Massachusetts, changed its name in 1868 to the town (now city) of Peabody , in honor of its favorite son. In 1869,

7366-405: The banks would not have fallen after the large ones did, and the money supply would not have fallen as far and as fast as it did. With significantly less money to go around, businesses could not get new loans and could not even get their old loans renewed, forcing many to stop investing. This interpretation blames the Federal Reserve for inaction, especially the New York branch . One reason why

7493-573: The beginning of the Depression. The Depression was preceded by a period of industrial growth and social development known as the " Roaring Twenties ". Much of the profit generated by the boom was invested in speculation , such as on the stock market , which resulted in growing wealth inequality . Banks were subject to minimal regulation under laissez-faire economic policies, resulting in loose lending and widespread debt. By 1929, declining spending had led to reductions in manufacturing output and rising unemployment . Share values continued to rise until

7620-465: The behavior of housewives. The common view among economic historians is that the Great Depression ended with the advent of World War II . Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression, though some consider that it did not play a very large role in the recovery, though it did help in reducing unemployment. The rearmament policies leading up to World War II helped stimulate

7747-462: The best practices of the day. Peabody's philanthropy won him many admirers in his old age. He was praised by European contemporaries such as Prime Minister William Ewart Gladstone and author Victor Hugo , and Queen Victoria offered him a baronetcy , which he refused. In 1854, the Arctic explorer Elisha Kane named the waterway off the north-west coast of Greenland "Peabody Bay", in honor of Peabody, who had funded his expedition. The waterway

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7874-438: The branch was saved, by 1954 there were only two morning trips to Boston and two returns trips during the evening. In 1956, the B&M ended all steam operations and began using Budd Rail Diesel Cars (also known as Buddliners or RDCs). However, the new railcars were not heavy enough to trip the signals on the Saugus Branch. In September 1957, B&M once again petitioned the D.P.U. for permission to end passenger service on

8001-450: The business from 1859 on. During the run on the banks of 1857, Peabody had to ask the Bank of England for a loan of £800,000: although rivals tried to force the bank out of business, it managed to emerge with its credit intact. Following this crisis, Peabody began to retire from active business, and in 1864, retired fully (taking with him much of his capital, amounting to over $ 10,000,000, or £2,000,000). Peabody, Morgan & Co. then took

8128-410: The collapse in global trade, contributing to the depression. By 1933, the economic decline pushed world trade to one third of its level compared to four years earlier. While the precise causes for the occurrence of the Great depression are disputed and can be traced to both global and national phenomena, its immediate origins are most conveniently examined in the context of the U.S. economy, from which

8255-465: The coming of the electric trolley cars connecting with the Elevated Railroad , it was probably one of the best paying stretches of railroad in New England". By 1869, there were fourteen passenger trips a day. During the 1870s, Eastern was plagued by a series of accidents. the most notable being the Great Revere Train Wreck of 1871 . In 1884 the Boston & Maine leased Eastern and in 1890 it consolidated Eastern into its system. Once B&M took control,

8382-475: The crash was a mere symptom of more general economic trends of the time, which had already been underway in the late 1920s. A contrasting set of views, which rose to prominence in the later part of the 20th century, ascribes a more prominent role to failures of monetary policy . According to those authors, while general economic trends can explain the emergence of the downturn, they fail to account for its severity and longevity; they argue that these were caused by

8509-442: The crisis, the U.S. Congress passed the Smoot–Hawley Tariff Act on 17 June 1930. The Act was ostensibly aimed at protecting the American economy from foreign competition by imposing high tariffs on foreign imports. The consensus view among economists and economic historians (including Keynesians , Monetarists and Austrian economists ) is that the passage of the Smoot–Hawley Tariff had, in fact, achieved an opposite effect to what

8636-633: The decade. The Depression had devastating economic effects on both wealthy and poor countries: all experienced drops in personal income , prices ( deflation ), tax revenues, and profits. International trade fell by more than 50%, and unemployment in some countries rose as high as 33%. Cities around the world , especially those dependent on heavy industry , were heavily affected. Construction virtually halted in many countries, and farming communities and rural areas suffered as crop prices fell by up to 60%. Faced with plummeting demand and few job alternatives, areas dependent on primary sector industries suffered

8763-408: The depression. Not all governments enforced the same measures of protectionism. Some countries raised tariffs drastically and enforced severe restrictions on foreign exchange transactions, while other countries reduced "trade and exchange restrictions only marginally": The gold standard was the primary transmission mechanism of the Great Depression. Even countries that did not face bank failures and

8890-435: The domestic price level to decline ( deflation ). There is also consensus that protectionist policies, and primarily the passage of the Smoot–Hawley Tariff Act , helped to exacerbate, or even cause the Great Depression. Some economic studies have indicated that the rigidities of the gold standard not only spread the downturn worldwide, but also suspended gold convertibility (devaluing the currency in gold terms) that did

9017-402: The drop in demand. Monetarists believe that the Great Depression started as an ordinary recession, but the shrinking of the money supply greatly exacerbated the economic situation, causing a recession to descend into the Great Depression. Economists and economic historians are almost evenly split as to whether the traditional monetary explanation that monetary forces were the primary cause of

9144-427: The economies of Europe in 1937–1939. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 ended unemployment. The American mobilization for World War II at the end of 1941 moved approximately ten million people out of the civilian labor force and into the war. This finally eliminated the last effects from the Great Depression and brought

9271-576: The end of the month. A large sell-off of stocks began in mid-October. Finally, on 24 October, Black Thursday , the American stock market crashed 11% at the opening bell. Actions to stabilize the market failed, and on 28 October, Black Monday, the market crashed another 12%. The panic peaked the next day on Black Tuesday, when the market saw another 11% drop. Thousands of investors were ruined, and billions of dollars had been lost; many stocks could not be sold at any price. The market recovered 12% on Wednesday but by then significant damage had been done. Though

9398-500: The explanations of the Keynesians and monetarists. The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending. Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets. Holding money became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating

9525-503: The few women in the labor force, layoffs were less common in the white-collar jobs and they were typically found in light manufacturing work. However, there was a widespread demand to limit families to one paid job, so that wives might lose employment if their husband was employed. Across Britain, there was a tendency for married women to join the labor force, competing for part-time jobs especially. In France, very slow population growth, especially in comparison to Germany continued to be

9652-452: The first week of June, 540 million in the second, and 150 million in two days, 19–20 June. Collapse was at hand. U.S. President Herbert Hoover called for a moratorium on payment of war reparations . This angered Paris, which depended on a steady flow of German payments, but it slowed the crisis down, and the moratorium was agreed to in July 1931. An International conference in London later in July produced no agreements but on 19 August

9779-606: The government tried to reshape private household consumption under the Four-Year Plan of 1936 to achieve German economic self-sufficiency. The Nazi women's organizations, other propaganda agencies and the authorities all attempted to shape such consumption as economic self-sufficiency was needed to prepare for and to sustain the coming war. The organizations, propaganda agencies and authorities employed slogans that called up traditional values of thrift and healthy living. However, these efforts were only partly successful in changing

9906-519: The home, or took boarders, did laundry for trade or cash, and did sewing for neighbors in exchange for something they could offer. Extended families used mutual aid—extra food, spare rooms, repair-work, cash loans—to help cousins and in-laws. In Japan, official government policy was deflationary and the opposite of Keynesian spending. Consequently, the government launched a campaign across the country to induce households to reduce their consumption, focusing attention on spending by housewives. In Germany,

10033-527: The initial crisis spread to the rest of the world. In the aftermath of World War I , the Roaring Twenties brought considerable wealth to the United States and Western Europe. Initially, the year 1929 dawned with good economic prospects: despite a minor crash on 25 March 1929, the market seemed to gradually improve through September. Stock prices began to slump in September, and were volatile at

10160-610: The intellectual, moral, and industrial education of the destitute children of the Southern States." His grandest beneficence, however, was to Baltimore, the city in which he achieved his earliest success. In April 1862, Peabody established the Peabody Donation Fund, which continues to this day as the Peabody Trust , to provide housing of decent quality for the "artisans and labouring poor of London". The trust's first dwellings, designed by H. A. Darbishire in

10287-563: The lack of an adequate response to the crises of liquidity that followed the initial economic shock of 1929 and the subsequent bank failures accompanied by a general collapse of the financial markets. After the Wall Street Crash of 1929 , when the Dow Jones Industrial Average dropped from 381 to 198 over the course of two months, optimism persisted for some time. The stock market rose in early 1930, with

10414-493: The line was used to transport gravel from Bow, New Hampshire to Revere during construction of roadbeds for the expansion of the Northeast Expressway . Between April and November 1968, there were four trips a day from Bow to the construction site with each train carrying 48 or 60 cars. In the spring of 1969, construction resumed with two trips per day. A total of 3.5 million cubic yards of gravel were transported to

10541-521: The market entered a period of recovery from 14 November until 17 April 1930, the general situation had been a prolonged slump. From 17 April 1930 until 8 July 1932, the market continued to lose 89% of its value. Despite the crash, the worst of the crisis did not reverberate around the world until after 1929. The crisis hit panic levels again in December 1930, with a bank run on the Bank of United States ,

10668-414: The mid-1930s, a severe drought ravaged the agricultural heartland of the U.S. Interest rates dropped to low levels by mid-1930, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment remained low. By May 1930, automobile sales declined to below the levels of 1928. Prices, in general, began to decline, although wages held steady in 1930. Then

10795-423: The monetary base and by not injecting liquidity into the banking system to prevent it from crumbling, the Federal Reserve passively watched the transformation of a normal recession into the Great Depression. Friedman and Schwartz argued that the downward turn in the economy, starting with the stock market crash, would merely have been an ordinary recession if the Federal Reserve had taken aggressive action. This view

10922-502: The most to make recovery possible. Every major currency left the gold standard during the Great Depression. The UK was the first to do so. Facing speculative attacks on the pound and depleting gold reserves , in September 1931 the Bank of England ceased exchanging pound notes for gold and the pound was floated on foreign exchange markets. Japan and the Scandinavian countries followed in 1931. Other countries, such as Italy and

11049-487: The most. The outbreak of World War II in 1939 ended the Depression, as it stimulated factory production, providing jobs for women as militaries absorbed large numbers of young, unemployed men. The precise causes for the Great Depression are disputed. One set of historians, for example, focuses on non-monetary economic causes. Among these, some regard the Wall Street crash itself as the main cause; others consider that

11176-435: The name J.S. Morgan & Co. The former UK merchant bank Morgan Grenfell (now part of Deutsche Bank ), international universal bank JPMorgan Chase and investment bank Morgan Stanley can all trace their roots to Peabody's bank. Though thrifty, even miserly with his employees and relatives, Peabody gave generously to public causes. He became the acknowledged father of modern philanthropy , having established

11303-615: The names reversed as Peabody became the senior partner. Peabody first visited England in 1827 to purchase wares, and to negotiate the sale of American cotton in Lancashire . He subsequently opened a branch office in Liverpool , and British business began to play an increasingly important role in his affairs. He appears to have had some help in establishing himself from Sir William Brown, 1st Baronet, of Richmond Hill and James Brown, sons of another highly-successful Baltimore businessman,

11430-647: The need to balance the national budget and was unwilling to implement expensive welfare spending . In 1930, Hoover signed the Smoot–Hawley Tariff Act , which taxed imports with the intention of encouraging buyers to purchase American products, which worsened the Depression because foreign governments retaliated with tariffs on American exports. In 1932, Hoover established the Reconstruction Finance Corporation , which offered loans to businesses and support to local governments. In

11557-499: The next 20 years. He established his residence and office in the old Henry Fite House , and became a businessman and financier. At that time London, Amsterdam, Paris and Frankfurt were at the center of international banking and finance. As all international transactions were settled in gold or gold certificates, a developing nation like the United States had to rely upon agents and merchant banks to raise capital through relationships with merchant banking houses in Europe. Only they held

11684-657: The next decade Peabody made four more trans-Atlantic trips, starting in 1835 and establishing a branch office in Liverpool. Later he established the banking firm of " George Peabody & Company " (later stylised as J.S. Morgan & Co. ) in London. In 1837, he took up permanent residence in London, where he lived for the rest of his life. In the 1840s, the state of Maryland defaulted on its debt and Peabody, having marketed about half of Maryland's securities to individual investors in Europe, became persona non grata around London. The Times of London noted that while Peabody

11811-408: The next generation of poor youth, and thereby promote greater equality in American society. Jacksonian Democracy promoted equality in politics; he promoted equality and culture through libraries, schools, museums and colleges. He rejected doling out cash to the poor as a waste of money in comparison to building permanent institutions that produced a steady stream of benefits. His last great benefaction

11938-550: The original 8.4 mile route was extended to the Grand Junction line in South Malden (now Everett) and to West Lynn, where it connected with Eastern's main line. This new line gave Eastern its first direct route into Boston as well as an alternate route. The connection with the B&M at Malden was also abandoned, though a short stub was used as an industrial siding by the B&M. In 1855, the Saugus Branch Railroad Co.

12065-483: The physical volume of exports fall, but also the prices fell by about 1 ⁄ 3 as written. Hardest hit were farm commodities such as wheat, cotton, tobacco, and lumber. Governments around the world took various steps into spending less money on foreign goods such as: "imposing tariffs, import quotas, and exchange controls". These restrictions triggered much tension among countries that had large amounts of bilateral trade, causing major export-import reductions during

12192-480: The policies prolonged the Depression instead of shortening it. Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%; in the U.S., the Depression resulted in a 30% contraction in GDP. Recovery varied greatly around the world. Some economies, such as the U.S., Germany and Japan started to recover by the mid-1930s; others, like France, did not return to pre-shock growth rates until later in

12319-406: The political situation in Europe. In their book, A Monetary History of the United States , Milton Friedman and Anna J. Schwartz also attributed the recovery to monetary factors, and contended that it was much slowed by poor management of money by the Federal Reserve System . Chairman of the Federal Reserve (2006–2014) Ben Bernanke agreed that monetary factors played important roles both in

12446-646: The practice later followed by Johns Hopkins , Andrew Carnegie , John D. Rockefeller and Bill Gates . In the United States, his philanthropy largely took the form of educational initiatives. In Britain, it took the form of providing housing for the poor. In America, Peabody founded and supported numerous institutions in New England, the South, and elsewhere. In 1867–68, he established the Peabody Education Fund with $ 3.5 million to "encourage

12573-505: The public. The American way was for the self-made millionaires to become self-made philanthropists, a model perfected in the next generation by Andrew Carnegie (1835–1919) and John D. Rockefeller (1839–1937). They agreed with Peabody that riches produced a duty to give most of it back to the community through specialized permanent foundations. Peabody was especially imaginative, and relied on his own memories of poverty and self-education to introduce new ways to educate and culturally enrich

12700-462: The quantity of reserves of capital necessary to extend long-term credit to a developing economy like that of the US. Peabody first visited England in 1827, seeking to use his firm and his agency to sell American states' bond issues, to raise capital for those states' various programs of "internal improvements" (principally the transportation infrastructure, such as roads, railroads, docks and canals). Over

12827-529: The request of the Dean of Westminster , and with the approval of Queen Victoria , he was given a funeral and temporary grave in Westminster Abbey . His will provided that he be buried in the town of his birth, South Danvers, Massachusetts (now Peabody). Prime Minister William Ewart Gladstone arranged for Peabody's remains to be returned to America on HMS Monarch , the newest and largest ship in

12954-450: The restoration of double track difficult, and prevent the addition of a multi-use trail. The Saugus Branch line will soon be the route of Northern Strand Community Trail , a 9-mile bicycle path and walking trail that will run through Everett, Malden, Revere, Saugus, and Lynn. On July 13, 2013, the trail entered the final stage of construction. The Saugus Branch mentioned in and is part of the title of Elliot Paul 's 1947 memoir Linden on

13081-591: The rights of the Saugus Branch and assumed its operations. In October 1852, Gardiner Greene Hubbard succeeded Webster as the president of the Saugus Branch Railroad Co. On February 1, 1853, the Saugus Branch opened for passengers. Andrews Breed served as the Saugus Branch's first superintendent. During the early days of the Saugus Branch, four trains a day were run from Lynn Common to Edgeworth in Malden with stops in East Saugus, Saugus Center, Cliftondale, East Malden (later Linden), and Maplewood. On April 10, 1854,

13208-638: The same statue , erected in 1890, stands next to the Peabody Institute , in Mount Vernon Park, part of the Mount Vernon neighborhood of Baltimore, Maryland . In 1900, Peabody was one of the first 29 honorees to be elected to the Hall of Fame for Great Americans , located on what was then the campus of New York University (and is now that of Bronx Community College ), at University Heights , New York. His birthplace at 205 Washington Street in

13335-690: The same tactics in Pennsylvania. Florida and Mississippi were the most persistent debtors and as such were excluded from Peabody's later philanthropies. Although Peabody was briefly engaged in 1838 (and later allegedly had a mistress in Brighton , England , who bore him a daughter), he never married. Ron Chernow describes him as "homely", with "a rumpled face ... knobby chin, bulbous nose, side whiskers, and heavy-lidded eyes." Peabody frequently entertained and provided letters of introduction for American businessmen visiting London, and became known for

13462-434: The scale necessary to make the grand experiments which would prove my case—except in war conditions." According to Christina Romer , the money supply growth caused by huge international gold inflows was a crucial source of the recovery of the United States economy, and that the economy showed little sign of self-correction. The gold inflows were partly due to devaluation of the U.S. dollar and partly due to deterioration of

13589-530: The site. Construction was completed on May 27, 1969, although the new expressway (intended to become part of Interstate 95 in Massachusetts ) was never finished, being cancelled due to regional opposition . On April 27, 1969, the New England division of Railroad Enthusiasts ran the North Shore Rail Ramble, a day-trip over freight lines formerly used by passenger trains, including the Saugus Branch. The Chelsea fire of October 14, 1973 caused

13716-549: The state. As one of seven children in a poor family, George suffered some deprivations during his childhood, and was able to attend school for only a few years. When he was a teenager, his father died, and he worked in his brother's shop to support his widowed mother and six siblings. He later expressed "I have never forgotten and never can forget the great privations of my early years". These factors influenced his later devotion to both thrift and philanthropy . In 1816, he moved to Baltimore, where he made his career and would live for

13843-476: The world, recovery from the Great Depression began in 1933. In the U.S., recovery began in early 1933, but the U.S. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933. There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years (and

13970-673: The world. The financial crisis escalated out of control in mid-1931, starting with the collapse of the Credit Anstalt in Vienna in May. This put heavy pressure on Germany, which was already in political turmoil. With the rise in violence of National Socialist ('Nazi') and Communist movements, as well as investor nervousness at harsh government financial policies, investors withdrew their short-term money from Germany as confidence spiraled downward. The Reichsbank lost 150 million marks in

14097-778: The worldwide economic decline and eventual recovery. Bernanke also saw a strong role for institutional factors, particularly the rebuilding and restructuring of the financial system, and pointed out that the Depression should be examined in an international perspective. Women's primary role was as housewives; without a steady flow of family income, their work became much harder in dealing with food and clothing and medical care. Birthrates fell everywhere, as children were postponed until families could financially support them. The average birthrate for 14 major countries fell 12% from 19.3 births per thousand population in 1930, to 17.0 in 1935. In Canada, half of Roman Catholic women defied Church teachings and used contraception to postpone births. Among

14224-658: Was a scramble to deflate prices to get the gold standard's conversation rates back on track to pre-WWI levels, by causing deflation and high unemployment through monetary policy. In 1933 FDR signed Executive Order 6102 and in 1934 signed the Gold Reserve Act . The two classic competing economic theories of the Great Depression are the Keynesian (demand-driven) and the Monetarist explanation. There are also various heterodox theories that downplay or reject

14351-505: Was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty; drastic reductions in liquidity , industrial production, and trade; and widespread bank and business failures around the world. The economic contagion began in 1929 in the United States , the largest economy in the world, with the devastating Wall Street stock market crash of October 1929 often considered

14478-478: Was a small part of overall economic activity in the U.S. and was concentrated in a few businesses like farming, it was a much larger factor in many other countries. The average ad valorem (value based) rate of duties on dutiable imports for 1921–1925 was 25.9% but under the new tariff it jumped to 50% during 1931–1935. In dollar terms, American exports declined over the next four years from about $ 5.2 billion in 1929 to $ 1.7 billion in 1933; so, not only did

14605-520: Was an "American gentleman of the most unblemished character", the Reform Club had blackballed him for being a citizen of a country that reneged on its debts. At first, Peabody sent letters to scold Baltimore friends about the need for the state to resume interest payment and rewarded reporters with small gratuities for favourable articles about the state. At last, in 1845 he conspired with Barings to push Maryland into resuming payment by setting up

14732-458: Was consolidated into the Eastern Railroad Co. For the remainder of its life, Lynn was the terminus for most Saugus Branch trains, though a limited number continued to Salem until World War I . Historian Francis B. C. Bradlee would describe the Saugus Branch as "one of the few fortunate investments of the Eastern" as it gave it access to the growing suburbs of Boston. He also wrote that "until

14859-474: Was endorsed in 2002 by Federal Reserve Governor Ben Bernanke in a speech honoring Friedman and Schwartz with this statement: Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again. The Federal Reserve allowed some large public bank failures – particularly that of

14986-494: Was founded to meet the increasing demand for securities issued by the American railroads , and – although Peabody continued to deal in dry goods and other commodities – he increasingly focused his attentions on merchant banking , specializing in financing governments and large companies. The bank rose to become the premier American house in London. In Peabody's early years in London, American state governments were notorious for defaulting on their debts to British lenders, and as

15113-426: Was given by American economists Milton Friedman and Anna J. Schwartz . They argued that the Great Depression was caused by the banking crisis that caused one-third of all banks to vanish, a reduction of bank shareholder wealth and more importantly monetary contraction of 35%, which they called "The Great Contraction ". This caused a price drop of 33% ( deflation ). By not lowering interest rates, by not increasing

15240-500: Was in the form of Federal Reserve demand notes. A "promise of gold" is not as good as "gold in the hand", particularly when they only had enough gold to cover 40% of the Federal Reserve Notes outstanding. During the bank panics, a portion of those demand notes was redeemed for Federal Reserve gold. Since the Federal Reserve had hit its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by

15367-508: Was intended. It exacerbated the Great Depression by preventing economic recovery after domestic production recovered, hampering the volume of trade; still there is disagreement as to the precise extent of the Act's influence. In the popular view, the Smoot–Hawley Tariff was one of the leading causes of the depression. In a 1995 survey of American economic historians, two-thirds agreed that the Smoot–Hawley Tariff Act at least worsened

15494-482: Was later renamed the Kane Basin , but Peabody Bay survives as the name of a smaller bay at the eastern side of the basin. On July 10, 1862, he was made a Freeman of the City of London , the motion being proposed by Charles Reed in recognition of his financial contribution to London's poor. He became the first of only two Americans (the other being 34th President and General Dwight D. Eisenhower ) to receive

15621-508: Was suggested by Francis Preston Blair , an old crony of President Andrew Jackson and an active power in the smoldering Democratic Party as a possible Secretary of the Treasury in the cabinet of President Andrew Johnson . At about the same time, Peabody was also mentioned in newspapers as a future presidential candidate. Peabody described the presidential suggestion as a "kind and complimentary reference", but considered that, at age 72, he

15748-518: Was the Peabody Education Fund, which had a dramatic impact in improving southern public schools. It was the first major philanthropic institution that gave large sums to poor blacks on the same terms as whites, albeit within the limits of racial segregation. Even more important was the institutional framework that Peabody devised, of a permanent professional foundation run by experts in philanthropy, who were guided by and indeed invented

15875-470: Was the rollback of those same reflationary policies that led to the interruption of a recession beginning in late 1937. One contributing policy that reversed reflation was the Banking Act of 1935 , which effectively raised reserve requirements, causing a monetary contraction that helped to thwart the recovery. GDP returned to its upward trend in 1938. A revisionist view among some economists holds that

16002-496: Was then the capital of world finance) where he became the most noted American banker and helped to establish the young country's international credit. Having no son of his own to whom he could pass on his business, Peabody took on Junius Spencer Morgan as a partner in 1854 and their joint business would go on to become the global financial services firm J.P. Morgan & Co. after Peabody's 1864 retirement. In his old age, Peabody won worldwide acclaim for his philanthropy. He founded

16129-526: Was too old for either office. While serving as a volunteer in the War of 1812 , Peabody met Elisha Riggs , who, in 1814, provided financial backing for what became the wholesale dry goods firm of Riggs, Peabody & Co. The firm specialized in importing dry goods from Britain. Branches were opened in New York and Philadelphia in 1822. Riggs retired in 1829, and the firm became Peabody, Riggs & Co., with

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