3. India in the Great Depression: Forged in Fire

434793462On Tuesday, 29 October 1929, the New York Stock Exchange opened under a cloud of fear. The market had been plummeting for the last five days and the brokers sensed that the worst was yet to come. They were not wrong. As the story goes, the opening bell of the exchange was never heard because the shouts of “Sell! Sell! Sell!” drowned it out. Within first thirty minutes, US$ 2 million evaporated into thin air and the slide continued. Phone lines were clogged and telegram service exhausted. By the end of the day, the market had lost US$ 14 billion – about 180 billion in today’s dollars. The ticker tape that recorded transactions ran for 15,000 miles! This was “Black Tuesday”, the beginning of the Great Depression, the longest, the deepest and the most widespread economic depression of the 20th Century. It would take the world twelve years to recover from it.

The news of “Black Tuesday” reached India only two days later. Even then, it wasn’t taken too seriously. The Times of India printed the story on its page 10. After all, how much effect could the Wall Street have on streets of Agra or Madras? As it turns out, a lot. The Great Depression ended up plunging Indian peasantry into years of misery and indebtedness. The economic distress was further exacerbated by sheer greed and mismanagement of the colonial government. Ironically, the same governmental greed also ended up unwittingly helping the nascent Indian industry, which emerged from the depression stronger than ever before. Continue reading