WWII - Causes - The Great Depression by LegionZ411

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									Social Issues, 1929-1942

The Great Depression

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America's future appeared to shine brightly for most Americans when Herbert Hoover
was inaugurated president in 1929. His personal qualifications and penchant for
efficient planning made Hoover appear to be the right man to head the executive
branch.


However, the seeds of a depression had been planted in an era of prosperity that
was unevenly distributed. In particular, the depression had already sprouted on the
American farm and in certain industries.
The Hoover term was just months old when the nation sustained the most ruinous
business collapse in its history. The stock market crashed in the fall of 1929. On just
one day, October 29, frantic traders sold off 16,400,000 shares of stock. At year's
end, the government determined that investors in the market had lost some $40
billion.


Previous to the 1929 collapse, business had begun to falter. Following the crash, the
United States continued to decline steadily into the most profound depression of its
history. Banks failed, millions of citizens suddenly had no savings. Factories locked
their gates, shops were shuttered forever, and most remaining businesses struggled
to survive. Local governments faced great difficulty with collecting taxes to keep
services going.
Hoover's administration made a bad mistake when Congress, caving in to special
interests, passed the Hawley-Smoot Tariff Act in 1930. The measure would hike up
tariffs to prohibitively high levels. The president signed the bill into law over the
objections of more than 1,000 economists. Every major trading nation protested
against the law and many immediately retaliated by raising their tariffs. The impacts
on international trade were catastrophic. This and other effects caused international
trade to grind nearly to a standstill; the depression spread worldwide.


Meanwhile, the president and business leaders tried to convince the citizenry that
recovery was imminent, but the nation's economic health steadily worsened. In spite
of widespread hardship, Hoover maintained that federal relief was not necessary.
Farm prices dropped to record lows and bitter farmers tried to ward off foreclosers
with pitchforks. By the dawn of the next decade, 4,340,000 Americans were out of
work. More than eight million were on the street a year later. Laid-off workers agitated
for drastic government remedies. More than 32,000 other businesses went bankrupt
and at least 5,000 banks failed. Wretched men, including veterans, looked for work,
hawked apples on sidewalks, dined in soup kitchens, passed the time in shantytowns
dubbed "Hoovervilles," and some moved between them in railroad boxcars. It was a
desperate time for families, starvation stalked the land, and a great drought ruined
numerous farms, forcing mass migration.


The Hoover administration attempted to respond by launching a road, public building,
and airport construction program, and increasing the country's credit facilities,
including strengthening the banking system. Most significantly, the administration
established the Reconstruction Finance Corporation (RFC) with $2 billion to shore up
overwhelmed banks, railroads, factories, and farmers.
The actions taken signified, for the first time, the U.S. government's willingness to
assume responsibility for rescuing the economy by overt intervention in business
affairs. Nevertheless, the Depression persisted throughout the nation.
A thirst for change
The electorate clamored for changes. The Republicans renominated Hoover, and the
Democrats nominated Franklin D. Roosevelt. His energetic, confident campaign
rhetoric promoted something specifically for "the forgotten man" — a "new deal."
Roosevelt went on to a decisive victory. At his inauguration in March 1933, Roosevelt
declared in his lilting style, "Let me assert my firm belief that the only thing we have to
fear is, fear itself — needless, unreasoning, unjustified terror which paralyzes needed
efforts to convert retreat into advance."


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The nation needed immediate relief, recovery from economic collapse, and reform to
avoid future depressions, so relief, recovery and reform became Roosevelt's goals
when he took the helm. At his side stood a Democratic Congress, prepared to enact
the measures he proposed.
Congress passed a historic series of significant bills, most of which had originated in
the White House, in just shy of a whirlwind 100 days. Congress also enacted several
important relief and reform measures in the summer of 1935 — sometimes called the
Second Hundred Days.
Significant legislation:


One act created the Federal Emergency Relief Administration to be administered by
Harry Hopkins. For relief or for wages on public works, it would eventually pay out
about $3 billion.
Three million young men found work in road building, forestry labor and flood control
through the establishment of the Civilian Conservation Corps (CCC).
The Works Progress Administration (WPA) of 1935 would grow out of the previous
two agencies.
The Emergency Banking Act provided the president with the means to reopen viable
banks and regulate banking.
Another law insured bank deposits up to $5,000, and later, $10,000.
A new Home Owners Loan Corporation (HOLC) assisted homeowners.
Farmers who voluntarily decreased the acreage of specified crops could become
recipients of subsidies from the Agricultural Adjustment Administration (AAA), set up
by the government.
One particularly significant act created the Tennessee Valley Authority (TVA). The
vast, ambitious project, coupled with agricultural and industrial planning, would exploit
the great river basin's resources with government dams and hydroelectric plants.


Progress was made on the labor front:


The National Recovery Administration (NRA) came into being through a significant
measure in 1933. The NRA attempted to revive industry by raising wages, reducing
work hours and reining in unbridled competition. The NRA was ruled unconstitutional
by the Supreme Court in 1935; however, the majority of its collective bargaining
stipulations survived in two subsequent bills.
Employees were guaranteed the right to negotiate with employers through unions of
their choosing by the Wagner Act of 1935, and it established a Labor Relations Board
as a forum for dispute resolution. The act bolstered the American Federation of
Labor, and pointed to the inception of the Congress of Industrial Organizations (CIO),
another labor movement.
The Fair Labor Standards Act of 1938 promulgated a 44-hour workweek with time-
and-a-half for overtime and pegged a minimum wage of 25 cents an hour. The act
also provided that the the hours would drop to 40 and the wage would incrementally
rise to 40 cents. In addition, the bill made child labor under the age of 16 illegal.
Relief, recovery and reform also affected the social welfare.


The U.S. government could reach out in the widest way to alleviate human misery —
such was the assumption that underlay the New Deal. Beginning in 1935, Congress
enacted Social Security laws (and later amendments) that provided pensions to the
aged, benefit payments to dependent mothers, crippled children and blind people,
and unemployment insurance.
To fund all the new legislation, government spending rose. Spending in 1916 was
$697 million; in 1936 it was $9 billion. The government modified taxes to tap wealthy
people the most, who could take it in stride most easily. The rich, conservatives,
numerous businessmen — and those who were all three — vigorously opposed the
New Deal. But the election of 1936 triggered a nationwide endorsement of FDR, who
carried every state except Vermont and Maine.
War looms
Franklin Roosevelt saw his domestic program inexorably superseded by war, much
like a predecessor, Woodrow Wilson. The League of Nations had folded by the time
FDR took office.
Clamoring for their perceived share of the world's pie, Germany, Italy and Japan
marched onto the world stage. Germany came under the sway of Adolf Hitler and his
National Socialist Party; Italy embraced Benito Mussolini's brand of fascism; and
military rulers gripped Japan. Those leaders were warlike dictators committed to
forging vast empires by armed might. When Japan invaded Manchuria in 1931 and
China in 1937, free peoples recoiled. Italy goose stepped into Ethiopia in 1935. The
Third Reich reoccupied the Rhineland in 1936 and absorbed Austria in 1938.
Isolationists believed the nation could remain aloof between the oceans and most
Americans went about their business trying to disregard the specter rising over the
horizon. However, the president and his secretary of state, Cordell Hull, had no truck
with isolationism and repeatedly warned the nation that when one country was
threatened by an imperial bully, all countries were threatened. In the fall of 1937,
Roosevelt called for action to isolate the aggressive powers, but his words fell on a
hard-of-hearing Congress and most of the public had their minds elsewhere.
In fact, Congress enacted several neutrality measures between 1935 and 1939 that
prevented the nation from giving financial credit to or trading with any nation engaged
in armed conflict. However, their effect was to invite aggression, because if Hitler
struck at France or Great Britain, they could not hope for the United States to furnish
them with arms or money.
To prevent the United States from entering the war in western Europe, which broke
out when Hitler's divisions invaded Poland in September 1939, isolationists
established the "America First" Committee in 1940. However, administration leaders
continued to condemn Germany and the other dictatorships. They strove to win Latin
America's and Canada's friendship, and commenced to bolster the armed services.
Meanwhile, more Americans arrived at the notion that the United States might be
next to fall under Germany's sway if western Europe fell.
War transforms the nation's economy
The United States had not fully put its economic woes behind it by the time Japanese
air and sea forces punched their fist through America's back door at Pearl Harbor in
December 1941. Even near the end of the Depression, unemployment remained
high. The 1940 census counted 11.1 percent of U.S. heads of household as
unemployed. However, a deep, latent productive capacity existed within American
industry.


In anger, the nation swiftly changed gears from a peacetime to wartime footing that
mobilized the populace and numerous industrial sectors. In January 1942 the
president called for unheard-of production goals. In that year alone, he wanted
60,000 warplanes, 45,000 tanks, 20,000 antiaircraft guns and 18 million tons of
merchant shipping.
Labor, farms, mines, factories, trading houses, investment firms, communications —
even cultural and educational institutions — were enlisted into the war effort. The
nation accumulated big money and generated huge new industries to mass produce
planes, ships, armored vehicles and numerous other items. Major population shifts
occurred as people headed to new jobs.
The draft helped bring the armed forces of the United States to more than 15 million
members. Approximately 65 million men and women were in uniform or worked in
war-related jobs by the end of 1943.
Massive unemployment became a thing of the past and the Great Depression was
swallowed up in the worldwide effort to defeat the Axis powers of Japan, Germany
and Italy.

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