These were seen as natural, therapeutic, and self-correcting.President Franklin Roosevelt's New Deal gave birth to the American version of the welfare state. The economy's output of goods and services (gross national product) declined 30 percent between 19 and recovered to the 1929 level only in 1939.Social Security, unemployment insurance, and federal family assistance all began in the thirties. Prices of almost everything (farm products, raw materials, industrial goods, stocks) fell dramatically.One exception to the hands-off attitude was the Federal Reserve, created in 1913. Farming and raw materials were much more important parts of the economy than they are today. Poor countries (including countries in Latin America, Asia, and Central Europe) exported food and raw materials and imported manufactured goods from industrial nations. This was one reason that convertible currencies, such as the dollar and pound, were used as gold substitutes.It was charged with the responsibility for providing emergency funds to banks so that surprise withdrawals would not trigger bank runs and a financial panic. This meant that lower commodity prices could cripple domestic prosperity and world trade, because price declines destroyed the purchasing power of farmers and other primary producers (including entire nations). The war weakened Britain, left Germany with massive reparations payments, and split the Austro-Hungarian Empire into many countries.To view the Great Depression as the last gasp of the gold standard—as economic historians Barry Eichengreen and Peter Temin suggest—bridges the gap between two popular explanations.The best-known, advanced by economists Milton Friedman and Anna Schwartz in A Monetary History of the United States, 1867-1960, blames the Federal Reserve for permitting two-fifths of the nation's banks to fail between 19 (or 10,797 of the 25,568 banks in 1929)."People will work harder, live a more moral life," Andrew Mellon, Treasury secretary under President Herbert Hoover, said after the depression started."Enterprising people will pick up the wrecks from less competent people," he claimed. Two-fifths of world trade was in farm products, another fifth in other raw materials. Wartime inflation, when the gold standard had been suspended, raised prices and inspired fears that gold stocks were inadequate to provide backing for enlarged money supplies at the new, higher price level.But between the wars no country did, and the depression fed on itself, Kindleberger argues.No country did enough to halt banking crises, and the entire industrial world adopted protectionist measures in attempts to curtail imports.