Kindleberger and His Explanation of the 1929 Depression

In chapter 14 of his book entitled The World in Depression, 1929-1939, Charles Kindleberger offers an explanation to understand what led to the Great Depression of the 30's, and why that depression had such a dramatic scope. Of course, he stresses the fact that this is just "an" and not "the" explanation.

Taking the questions of "what?" and "why?" as starting points, Kindleberger then suggests that the Great Depression could have been a "fortuitous event" (hazard), "the consequence of U.S. Federal Reserve Board deliberate and misguided policy" (incompetence or ignorance), or the product of a complex and intricate international system.

For him, the international economic system was rendered unstable by the British inability and the American unwillingness to stabilize it by taking on the role of an economic hegemon/leader (although Kindleberger doesn’t like this term, it is basically what his thesis implies). The responsible unit (or hegemon) would have to fulfill the following functions:

1) Maintaining Open Market for Distress Goods: Kindleberger wants to avoid another "Smoot-Hawley" because it turned out to be terrible for international economic relations and thus terrible for the stability of the system.

2) Providing Countercyclical Lending: