The circle would then be complete for there was no apparent way of checking

The circle would then be complete for there was no

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stocks on the market. The circle would then be complete, for there was no apparent way of checking this downward spiral after it had been setSource: William E. Leuchtenburg, The Perils of Prosperity, 1914-1932, 1958.in motion.Document #5...The war (World War I) had produced a revolutionary change in the world economy' In 1914 the United States was a debtornation; American citizens owed foreign investors three billion dollars. By the end of 1919, the United States was a creditor nation, with foreigners owing American investors nearly three billion dollars. In addition, the United States had loaned overten billion dollars to foreign countries, mostly to carry on the war, in part for post war reconstruction....If the United States was to function as a creditor nation, it had to import more than it exported (only by selling to the US could foreign nations get the money to pay off US creditors). But the country moved in precisely the opposite direction. By an emergency tariff in l92l and the Fordney-McCumber Tariff Act of 1922, the United States...restored the high prewar rates and added a few new high tolls of its own....In 1930, neo-mercantilism (the attempt to export more than was imported, regardless of the long-run effect) was carried asfar as it could go with the adoption of the Hawley-Smoot Tariff; in the teeth of protests from thirty-four countries and over one thousand American economists, Congress stepped up tariff rates still higher. As the economists had warned, the new law throttled world trade and brought a wave of retaliation from other countries.Document #1Document #2
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