The economic crisis of the 1930s in France

The world crisis began in February 1929 or even at the end of 1928 if one takes into account the world market in raw materials. At that time France had just devalued the franc and was flourishing both financially and economically. From February I929 shares on the Stock Exchange and wholesale prices began to fall. At the end of the year the losses already amounted to I6 per cent and 10 per cent respectively. Nevertheless economic activity continued to progress; industrial production rose until May I930; public expenditure increased, maintaining a slight trend towards inflation. This favourable state of affairs won for France the name 'l'ile heureuse', but the euphoria was shortlived and was due to the benefits accruing from the fairly steep devaluation which left French prices below foreign ones. With a total lack of foresight, this margin was squandered quite rapidly. Not outward-looking by nature, the French thought that with the gold pouring in they were all the more protected from the storms of the world outside. There was virtually no unemployment, and retail prices continued to rise until October I930. The first signs of hardship soon appeared. Early in 1931 it was quite clear that economic activity had slowed down. Production dropped by 10 per cent from the maximum and there were signs of unemployment. The approaching elections of I932 were beginning to make themselves felt, but still no political solution to the crisis had been put forward. On 20 June 1931 President Hoover proposed a year's moratorium on interallied debts, on condition that Germany was granted an identical moratorium on the annual payments laid down by the Dawes plan for reparations. Now hard pressed for time, France had to comply, although she would lose considerable

Economic history · Economic policy · Economics · Political economy · Political science · French Historical and Cultural Studies · History

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