The Great Depression in the USA.

by neira (student)

The Great Depression in US

The Great Depression was the longest and the worst economic collapse in the USA and the rest of the world too.Americans mostly were not aware of the problem in their economy , they were actually very optimistic and had thoughts that America is passing through a 'big boom' –period of prosperity .Even some experts were spreading wrong thoughts :'There may be a recession in stock prices ,but not anything in the nature of cash' said one of the leading US economists ;Irving Fisher just a couple days more than month before 29th of October ; 1929-the day when Wall Street stock market crushed . The begining of the Great Depression was triggered .The fact of America not being prepared for the collapse that happened made it more difficult to face and struggle all the consequences and finally deal with them in an efficient way . These consequences were huge and all spheres of life in the USA were affected by them .Economy was directly stroked and affected ; there were rapid declines in the productions and sale of goods , banks and other businesses had to close . That pulled other problems ;such as sudden rise in unemployment . People were losing their jobs , their homes also and they had to face with extremly difficult living conditions . All this led to changes in government . Great Depression had huge impacts on ewconomy , social life and politics in the USA .

US economy , as it is stressed was the most affected sphere of life, and it caused a lot of problems in others spheres . Anyway , the years that preceded the crisis seemed as a prosperous time for the US economy . Enormous profit made in industry was not equaly shared between workers . The most obvious example was that in a period 1923-1929 industrial profit was increased by 72 %. For workers , average wage was increased for 8 %. Ordinary citizens in general , due to this example were not in ability to sustain the prosperity . Industry , later on , produced much more than the markets absorbing

capacity .'the seeds of a great depression had been planted in an era of prosperity that was unevenly distributed.’(2) . On the 29th of October , when the stock market crashed 16 400 000 shares of stock have been sold .At the end of the year 1929 it was counted that $40 billion had been lost (due to the source 2). So , things started getting worse . People were afraid for their savings and they wanted their money back . It caused rapidly falling of economy , many banks were overhelmed and were not able to give money back , so most of them soon were closed . There were approximately 25 thousands bank in the US , and four years later there were less than 15 thousands of banks in the whole country .Money fell for the 53 % in the same period , so demand fell as a result of that. It reduced production of goods as well .

If we continue with this , as demand for goods fell rapidly , due to that many factories were closed . So, ‘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.’(quote from source 2). Closed factories had devastating effects for the workers , 15 millions Americans were left without their jobs , in percents – unemployment rate 25 %.

American president Herbert Hoover was convinced that crisis was short-term . From his point of view economy of the USA soon supposed ...

This is a preview of the whole essay

American president Herbert Hoover was convinced that crisis was short-term . From his point of view economy of the USA soon supposed to continue with prospering the same way it did before the collapse . In one of the public speeches president Hoover said to American people :

"While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us." Unfortunately , crisis was not over , as he thought . After president saw that the situation is more serious than he wanted to believe he started encouraging employers to not reduce wages, and especially not to lay the workers off . He did it in corporation with his administration in hope of solving some problems . Further on , president began with introducing public works to reduce unemployment ,. He lent government’s money to the banks , industrialists and farmers in order to prevent further impacts and save them of bankrupts .

In 1931 president made a radical decision .One-year war debts moratorium was declared . It meant that countries could miss paying one installment of their war debts . President hoped that this moratorium will help them to overcome the crisis . He thought that the money will be used to buy goods from America and in that way increase their export .This made no difference because American exports in 1932 were less than a third of the export in 1929 .

President Hoovers policy failed and after that people lost their faith in him and his administration . Due to this , it was not a huge surprise when Franklin D. Roosevelt beat him easily in the presidential elections , 1932 .

Roosevelt was a man which America needed that time : full of new ideas , dynamic with confident new campaign . He seemed to be the best solution for the problems America encountered ; promising a ‘new deal’ for American people .

"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."- said Roosevelt on his inauguration speech .

He understood what the nation needed –an immediate recovery from the collapse and reform to stop future crisis . It became his main goal .He had courage to make drastic changes and measures . is methods were completely different from those which had Republicans , he was ready to pull America out of the Great Depression , even if it means that he has to spend all government money .

He also introduced series of measures which helped America a lot to overcome the Great Depression called ‘New Deal’ . New Deal consisted of different kinds of acts and relieves that helped American industry , agriculture , improved social security and also working conditions .

New Deal was also one huge step for the whole American nation in her way of recovery from the crisis caused by the Great Depression . Anyway , on the other hand it can be said that it did not achieve everything What Roosevelt expected . Some of the measures failed , such as ‘The Farmers’ and some of them didn’t achieve expected results .

Still , in the period of Roosevelt presidency government placed a lot of attention and intervened directly for the lives of ordinary people , so this was a remarkable period in US history .

The Great Depression had the biggest and the strongest impact on economy , which influenced all the other spheres of life , specially social welfare .

American people were almost starving . Charity kitchens full of people , the bread lines , eviction of those who could not pay the rent and became homeless – that was a picture of brutal American reality . Number of people who actually died from starvation was small but most of them were forced to eat weeds or find food in the garbage . Just one example of the awful consequences ‘study conducted in eight American cities found that families that had a member working full time experienced 66% less illness than those in which everyone was unemployed.’ Government was indicating that this crisis caused by the Great Depression was a a social issue and not a matter of individual failing a lot of men thought abut themselves as self-sufficient . They found humiliating the fact they have to ask for help.Also , men argued about women being employed . They thought women are not supposed to work while men are unemployed . Still , there was a slight percentage of growth during the crisis caused by Depression of women as a workforce .Women were excluded from most of jobs in the earlier past , so , due to that it was less likely that they will be thrown out of their jobs .

When it comes to children , effect of the Great Depression was also enormous on them too .In their earl age ,because of the complet situation many of them had to take responsibilities . Some of the teenagers even found jobs and were the ones who were actually feeding their families . All this made children of this period more mature and also affected on a strengthening of their self confidence .

Some racial issues at the time of the Great Depression were also raised .The complete situation was even more damaging for the black population , because they were the ones who get fired first and get hired last .By year 1932 about 50% of the nations black workers were left without jobs , mostly in order to handle their jobs to the unemployed white people.

Anyway , already mentioned ‘ New Deal’ made a big changes . Eleanor R. ;First lady at that time was one of the leading figures in fighting against rasicm and racial discriminations , most of the Nw Deal programs prohibited it . Because of this black people were mostly impressed with the ‘New Deal’ . It had political consequence , many of the stopped supporting Republicans and became voters of Roosevelt Democratic Party .

The Great Depression had a lot and enormous influence on the USA and her citizens . American economy was highly influenced and weakened starting from the very first day of the Wall Street Crush . Years of prosperity were not so successful and it was obvious , anyway the government still did not want to admit that . The prosperity was based mostly on an unequal profit share . The workers wage was still low , they did not have enough money to sustain the huge prosperity occurred . Obviously , it was only matter of time when everything will collapse . President Hoover’s government was not in ability to find the proper way to deal efficiently with all the consequences and after making radical decisions people lost their faith in government . As a logical consequence of the situation democrat Roosevelt became new president in 1933. ‘New Deal’ , series of measures was introduced by him .I was done in the order to save the country and to prevent future crisis. The fact is that ‘New Deal’ solved a lot of problems during the crisis to American nation , some historians argue that this deal brought brought real prosperity to American nation . Impact of the crisis on the social life of American nation was huge . Their life transformed from the American dream to a night mare . People lost their jobs , homes and pride . Women or children in a lot of cases were those who were feeding the whole family after men lost jobs . More self-confidence was given to them this way. Blacks were affected even more because of the rational discrimination . ‘’New Deal ‘’ changed everything . It prohibited discrimination of black population and better time came . On the paper they were equal and it made them supporters of Roosevelt’s Democratic Party . So , Great depression was a hard period for the US in all spheres of life .

Kadić Neira

References:

‘Modern world history ‘ Norman Iove http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=105x29

98820

http://www.u-s-history.com/pages/h1569.html

http://www.greatdepressiononline.com/causes-of-the-great-depression.htm

http://www.britannica.com/EBchecked/topic/243118/Great-Depression