Экономическое развитие США в начале ХХ века и Великая Депрессия
Secondary
School № 8
The
Ministry of Defence
Of
the Russian Federation
The Economic Development of the USA in the First Half of the XX Century and the Great Depression.
Research
paper by
Tsarev
Dmitri
Grade
10”A”
Scientific
adviser (teacher)
Nadezhda
Prokosheva
Sevastopol
2006
The outline
Introduction.
p.2
Chapter
I: The rise of industry. p.3
1.
The
rapid expansion of the railroads
2.
The
growth of big business and government’s control over it
3.
People’s
struggle for a better life
Chapter
II: The wave of the immigration and its influence on the social and economic
life in the country. p.6
1.
The
growth of the cities
2.
The
great inventions and a new way of life in cities
3.
Trade
unions and the era of fight for rights
Chapter
III: World war I and its consequences for the USA. p.10
1.
Labor
unrest
2.
Racial
unrest (ku-klux Klan, anti – immigration laws)
3.
The
new era (jazz age)
Chapter
IV. The Great Depression and The New Deal.:
p.13
1.
The
beginning of the Great Depression and its reasons
2.
F.
D. Roosevelt and his New Deal
3.
Government’s
efforts to reduce the immigration
4.
The
opposition to the New Deal
5.
The
role of the New Deal in coping the depression
Conclusion.
p.17
Introduction
The modern USA represents an interesting object of
researches for economists of the whole world. The country that has managed for
a rather short period of time to become the world’s economic leader should
cause interest. Besides, nowadays America shows significant success in carrying
out social programs: in supporting the poorest layers of the population, in
solving the problems of unemployment, racial discrimination, criminality, etc.
Certainly, a number of problems still remains, but the general dynamics of
development are evident.
The 1920s were called the New Era in American life. This
decade was the time of unprecedented social, economic and political change. It
was the time when America was becoming a modern nation. It was a period of
almost uninterrupted prosperity and economic expansion. In 1928 Herbert Hoover, President of the country, proclaimed,” We in America are nearer to the final
triumph over poverty that ever before in the history of any land. The poorhouse
is vanishing from among us”. Only fifteen months later, the nation plunged into
the severest and most prolonged economic depression in its history-a depression
that continued in one form or another for a full decade. The Depression was a
traumatic experience for individual Americans, who faced unemployment, the loss
of land and other property, and in some cases homelessness and starvation. But
the country had been able to survive and recover.
There are a lot of problems in the national economy of Russia and Ukraine nowadays: the industrial production is decreasing, the prices are constantly
rising, and the rate of inflation is very high. People are losing their jobs
because many factories and plants are being closed. This process reminds the
period of the Great Depression in the USA. I got interested in this theme for
my research because I would like to understand the processes taking place in my
country better.
So, the main aim of this research paper is to understand
how America being influenced so much by the Depression in the first half of the
century was able to become a super power again in the second half of the XX
century. Also I want to understand why this depression began in the beginning
of the XX century despite positive social and economic development in the
country at that period of time.
In
my research I would like to find out:
how the life
of America changed after the Civil War of 1861-1865;
how America, being such a young country has become a super nation;
the processes in American life that preceded the Great
Depression and how they influenced social and economic life of the United States;
if the Great Depression was an inevitable, or predictable
phenomenon;
how the United States managed to cope with the Depression and
its consequences.
Chapter 1
The Rise of Big Business.
Life in America changed very much after
the Civil war. Americans lost no time in industrializing their nation and in
building trade relations with other countries.
As a result of new inventions, economic
activity increased. By the time Americans celebrated their first hundred years
of independence in 1876, the US was one of the world’s leading industrialized
powers. The American economy was booming and prosperity was spreading, though
half of industrial workers lived in poverty.
The driving force behind the industrial
growth of the United States was the booming railroad industry. As an
example I can give the following statistics: in 1865 the nation had about 48.000 km of track and by the 1900 320.000 km of tracks covered the nation like a giant spider web.
It was the biggest railroad in the world.
Some railroaders were laying tracks in
the West; others were making lines in the East and the Midwest. The south
repaired lines which were wrecked during the Civil War and added seven times
more miles of tracks. As railroad crisscrossed the United States, they created
a national market for the country’s raw materials and manufactured goods.
Railroads carried coal from mines, oil from wells, etc.
Also railroads made life better for
different merchants who could now deliver goods across the country, shopping by
the mail again. In 1872 Aaron Montgomery Ward, a young salesman had an idea for
giving farmers a greater selection of goods than they could find in local
stores. That year he sent out one – page list of items for sale. By 1874 his
single sheet had grown to a 72 – page catalog.
Ward soon had a competitor which rushed
after the pioneer into this new field of work - Sears, Roebuck and Company.
Their catalog including more 1000 pages of items was called “the Great Wish
Book”.
Madame C. J. Walker created a national
market for her hair – care products both by sending them through the mail and
by hiring young women to sell these products door to door. Starting her company
in the early 1900s with $1.50, she was the first African American women in the
nation to become the millionaire.
Of course, such a big system as the
railroads of the United States needed very strict system of regulation. In the
beginning of this system it was very difficult to regulate it. People had to
risk helping trains to go on rails without failures or disasters on railroads. John
Westinghouse’s air brakes and George M. Pullman’s sleeping cars made rail
travels safer and more comfortable.
As the USA industrialized and broadened
its trade links, a group of men emerged who would dominate the economic future
of the country. These were the industrial giants. They had a sense of vision to
see opportunities for production and marketing where others had not. And they
had the willingness to take risks. The industrial giants were able to use new
inventions and corporate systems to make production costs lower and provide
products and services to growing numbers of consumers.
When America entered the 20th
century, industrial power became concentrated in the hands of fewer and fewer
people.
Among them there were such people as
Andrew Carnegie, John D. Rockefeller, J. Piermont Morgan and Henry Ford.
Andrew Carnegie was an immigrant from Scotland. When he was young his family emigrated from Scotland to the USA. His young life was very difficult. He tried so many different jobs that it is
difficult to imagine how he could work so hard. He started to work, earning
only $1.20 and then he earned $2.50 per week. It was hardly to imagine that
this boy would be a millionaire in future. But suddenly his talent of being
businessman was recovered with his employer which impressed him greatly –
Thomas A. Scott. Than his career began growing rapidly.
Carnegie knew that steel was better than
iron for large construction projects because it was stronger and more flexible.
However, making iron into steel was expensive. But salvation of this problem
came to him during the visit to the Britain to his colleague Henry Bessemer.
Process that was invented by the Henry Bessemer reduced the cost of the making
steel. Upon his return Carnegie began to produce steel instead of iron. A year
later, Carnegie and several partners chose Pittsburg, Pennsylvania, as the site
for a steel mill that used the Bessemer process.
Carnegie’s main wealth started in the
period between 1870s and 1890s, in the period when steel production was growing
rapidly. Competition for customers was fierce. Carnegie was determined to win
only by selling a better product at a lower cost than other companies. He hired
scientists to improve his steel and the best managers he could find to produce
it. He also set out to control every step in the steelmaking process. He did
not want to pay outsiders for work his own company could do at a lower cost. By
the 1890s Carnegie’s company was mining all the ore it needed from its own
mines. His own ships and railroad transported the ore to his Pittsburgh mill.
Carnegie was also gaining control of the
steel industry through consolidation. In the 1870s and 1880s he bought out
several rival companies. In 1892 he combined them to form giant Carnegie Steel
Company. It produced 25 percent of the nation’s steel.
J. Piermont Morgan was another man to
start new era of the American economy. In the late 1880s he was the most
powerful investment banker in the United States. Believing that cutthroat
competition was wasteful, he bought failing railroads and consolidated them.
Next Morgan decided to merge his
railroads with steel companies into a single large corporation. Only Andrew
Carnegie stood in his way. Instead of challenging Carnegie, the wily Morgan
offered to buy him out. The idea appeared to Carnegie who was now 66 years old.
He sent Morgan a scrap of paper with his paper with his price on it: $480
million. Morgan agreed on the spot.
In 1901 Morgan formed the United States
Steel Corporation. The largest corporation in the world at that time, it made
three-fifths of the nation’s steel.
John D. Rockefeller was a person that started
his work in the unknown field of business – oil.
In 1855 a scientist reported that oil was a good lubricant for machinery. Refined oil also made an
excellent source of light and heat.
In 1859 the nation’s first oil well was
drilled in Pennsylvania, spurring a frantic rush for “black gold.” Soon oil
wells were pumping in Kentucky, Ohio, Illinois, Indiana, and West Virginia. By
the early 1900s huge new oil fields had been discovered in Texas, California, and Oklahoma.
One of the early visitors to Pennsylvania’s oil fields was John D. Rockefeller. Growing up in Cleveland, Ohio, he had started a business to sell farm produce when he was 20 years old. Instead of
fighting in the Civil War, he paid for a substitute and expended his business.
In 1862 Rockefeller established an oil-refinering business in Cleveland. Eight
years later he reorganized the business as a corporation, Standard Oil of Ohio.
Faced with intense competition and falling prices, Rockefeller set out to gain
control of the oil-refinering industry. He made deals with railroads to give
rebates to Standard Oil .He could then lower his prices and force rival
refineries out of business. In a depression that began in 1873, he bought the
bankrupt companies.
Henry Ford was another person who began to restore
American economy. One of the greatest business successes of the 1920s – the
“Automobile Boom” is closely connected with the name of Henry Ford. Automobile
had been produced since 1890s but only the wealthy could afford them.
By the 1920s, however, automobile
factories were using a less expensive production method. Developed by Henry
Ford in 1913, the assembly line (conveyor belt) is a system which is used in
different kinds of production all over the world even now. This system made the
production of automobiles much cheaper and faster, so almost every American had
an opportunity to buy a model of Ford’s production. The popularity of
automobiles helped fuel the economic boom. Industries essential to auto
manufacturing, such as steel, glass, rubber, oil refining, and road
construction, experienced rapid growth and created thousands of new jobs. Gas
stations and tourist courts (motels) – unknown in horse-and-buggy days – lined
the roadsides. So, Henry Ford made his contribution into economic development
and changing of the US.
Chapter 2
The wave of immigration
1. The role of the immigrants and their
life in the cities.
One of the characteristic features of
the immediate post-Civil War years was the tidal wave of immigration washing
across the United States. Between 1860 and 1900 the United States received more than 13 million immigrants. Those were people from all corners
of the world who hoped to find a better life in America. They were landless
peasants from Italy, unemployed craftsmen from Germany, starving farmers from Ireland…Besides, Americans themselves also moved to the West after America had obtained new lands
there and the transcontinental railroad had been built. Americans flocked to
the cities from farms and small towns in huge numbers seeking better jobs and
betters lives. The growth of cities was phenomenal.
The
immigrants that were arriving from overseas were, for the most part, the
landless, the unskilled, the poor. Part of their problem was that without
money and job skills most of them were trapped in the great eastern sea cities
that simply couldn’t handle them.
So, most of the people who came to the United States didn’t have happy
and
rich life in America. They lived in small poor houses, and they joined the army
of the workless and poor people. Many immigrants worked at small dirty
factories and were endangered by many different diseases. They were not
protected enough, so this problem needed to be solved fast.
Many families were able to survive in America only because their children could earn some money.
Despite this, millions of immigrants
helped build America. Some of them became rather rich and wealthy. But most of
them still were poor, and lived in poor conditions.
2. The great new inventions change life
of American citizens.
The great technical advances in American
industry owed much to American inventors. After the American Revolution there
were no machines to make people’s life easier. There were no cars, telephones,
or electric lights. The new inventions that were made in the 19th
century helped to transform America from an agricultural country to a highly
developed industrial nation.
Alexander Graham Bell was an immigrant from Scotland. Alexander Bell was a teacher of the deaf children. He taught them how to speak.
But we know him as the inventor of the telephone. He was the first person to
get a patent for this invention. In 1876 he made the first telephone.. In a few
years there were telephones completely in every house of American cities and people
who were far apart could communicate with each other.
Thomas Alva Edison was the greatest inventor in
the world’s history. He made more than 3000 different inventions: the “ballot
machine”, quadruples, he upgraded the Bell’s telephone, he made the phonograph,
and many other inventions. One of the most useful inventions was the electric
bulb that made houses and streets of the United States full with light.
Jan Matzeliger was an African American who
simplified the process of making shoes. He invented a special machine that
could make shoes of many different sizes easily. Today most of the factories
work using the same technology.
In this respect, special attention
should be paid to Henry Ford. He was not only a great businessman, but
he was also an inventor. For many years people in America had to ride horses
but in 1896 Ford made one of the first cars in America.
He
started a factory, the “Ford Motor Company” that made cars. He wanted his cars
to be cheap and available for every American. .He used a conveyor belt in his
factory. Thank to it, the cars were put together quickly, in less than two
hours, and were not expensive. With the help of the conveyor line, it was
also much easier and quicker to make different products. Conveyor lines are
still used in many factories of America and other countries of the world.
All these inventions changed American
way of life greatly. People began to live better with the help of different
machines. The inventions like the electric bulb, the traffic light (made by Garrett
Morgan in 1923), the telephone, the car and the conveyor belt changed the
way Americans lived..
3. Immigrants are restrained in rights.
The beginning of the XX century was
marked with the beginning of the company of social minorities for their rights.
Immigrants, workers, women and children were those people who felt bad in the
beginning of the XX century As it has been mentioned in one of the previous
chapters, the living conditions of immigrants were very poor. They often knew
English badly, they lived in small crowded houses, and many of them had to work
at factories, being endangered by different diseases. Sometimes immigrants had
to make their children work at factories to feed their families. Taking into
consideration these problems, Government accepted a program about building many
free schools where children of immigrants could study and some night schools
where their parents joined. After few years the child labor was prohibited in
the United States. Then the law was approved, which told that if an immigrant
had been living in the United States for five years already he could be a
citizen of the United States and exercise the right to vote. After changing
their life many immigrants helped America greatly. Some of them became teachers
or doctors, workers or diplomats. Their life was becoming better from year to
year, though they still had a lot of problems.
Immigrants played an important role in
the history of the United States. They made their contribution into building
railroads, making new inventions, that helped America to become a more
developed industrialized country, they took a active part in the working
movement for a better life and civil rights.
4.
Women
fight for their rights.
Four women were founding ways to make
life of the simple Americans better.
Jane Addams helped people in a
neighborhood of immigrants in Chicago. In 1889 she bought a large old house
called Hull House. She bought Hull House with her own and with money of some
other people. Hull House helped people from the neighborhood in many ways. Hull
House workers took care of small children while their parents were at work.
Immigrants learned to speak English at Hull House. Addams helped them to become
American citizens. Addams started clubs at summer camp for children. She started
the first playground in Chicago. She also worked to get new laws that would
help the immigrants.
Janie Porter Barrett became the
colleague of the Jane Addams. She was one who has followed the lead of Jane
Addams. In 1890 she started the Locust Street Social Settlement House in Virginia. At this house Barrett helped African American women learn better ways to care for
their homes and children.
Lillian Wald was one more woman that
wanted other people to be happy. She was a nurse. Her parents were Jewish
immigrant. In 1895 Wald started the Henry Street Settlement House. This house
had a kindergarten, clubs, English classes, and a library. Lillian Wald also
helped sick people. So she started a visiting nurse program in the New York City. Also she started school nurse program.
Alice Hamilton was a doctor who lived
first worked at Hull House. She took care of sick children here. She understood
that workers were working at terrible conditions. She understood that workers
that worked at paint factories became poisoned because of lead that is in the
paint. After the poisoned workers became weak . She showed how to work not to
have such poisoning. Alice Hamilton worked also worked to get mew laws for
factory workers.
Jane Addams, Janie Porter Barrett,
Lillian Wald, Alice Hamilton, and other women proved that women could make
important changes in America.
But soon, after World War I, women began
to protest against their discrimination. They helped the country, working as
doctors, workers at factories, but they still had no right to vote. They
couldn’t vote for their country’s leaders. Many years before that time Susan B.
Anthony and later Elizabeth Cady Stanton wanted women to have such a right.
They traveled through all over America and told men and women that the
Constitution needed such an amendment. Anthony and Stanton worked together for
many years. Elisabeth Cady Stanton died in 1902 and Susan B. Anthony died in
1906. When they died the Constitution still didn’t allow women to vote.
Other women were working for an
amendment to the Constitution. And in 1920 their efforts were a success.
Congress accepted the Nineteenth Amendment to the Constitution which has
guaranteed the right of voting to the American women. Nowadays women work not
only in Congress, they accept such jobs that used to be considered men’s ones.
Now rights of women are written in the Constitution. Now there are many women
who are successful n different spheres of economy of the USA.
5.
Unions
help the working people.
By 1900 millions of Americans were
working in factories. Many of them were immigrants. They spoke little English,
some of them used to be criminals, some of them had to make their elder
children work, too to feed their family. They could not earn enough money and
they were afraid of being fired. Their children had no opportunity to visit
school so in future they could join the army of unemployed.
Factory workers decided to start helping
themselves. They started labor unions that worked for better conditions and
higher salaries for workers. When employers didn’t want to increase salaries,
workers started demonstrations called strikes. Often these actions brought
losses to the bosses of the factories so they had to accept requirements of the
workers. Labor unions have helped workers to improve working conditions.
Samuel Gompers was one of the most
famous leaders of the unions. He was a Jewish immigrant from England. He started working in factories when he was only 13 years old. He became the
leader of the one of the labor unions. Sam felt that workers all over America should have unions. He began working to get new legislation that would protect
civil rights of proletarians. In 1886 he helped to start the American
Federation of Labor (AFL). Many unions joined the AFL. Gompers was deserved
president of the AFL. During his work here this organization prospered and
became popular. Slowly AFL changed state of affairs: from that time workers
were given big salaries, the conditions of places their worked in were
completely always excellent. If something was wrong AFL tried to solve every
problem which was caused by the masters of the factories.
There was one more person that worried
about destiny of workers in United States. Mary Jones was an Irish immigrant
who also helped workers to attend unions. She traveled all over the United States and called people to enter unions. She was called by workers “Mother Jones”
because she was more than seventy years old and very kind to them. She also
told people about their rights, helped them in a fight with their bosses.
Mother Jones lived to be 100 he died in 1930.
By the beginning of the Great Depression
millions of workers were joining unions.
6.
The
politics of the Progressives.
Between 1900 and 1920 a reform movement developed in America which sought to remove injustices and hard ships caused
by the new industrial society. The people involved in this movement came to be
called Progressives. They took special measures concerning the health of women
and children. They wanted the secret ballot, which would make elections more
honest. Higher education and vocational training would help people earn more
money. Regulation of the railroads would protect the public. The Progressives
worked for all these things. The most important Progressive idea was that government
had the responsibility to help the individual citizen.
On the whole it was a radically new
movement. It differed from the former politics of the US government, because it was less conservative than previous generations of the governments that
substituted each other from year to year in America’s office. The integrating
of America to the world’s business began. From that moment the role of simple
citizen became also rather high.
7.
The
“Jazz Age”
In the 1920s praised morality of the
Americans cracked. It was a dizzying time. The nation was experiencing greater prosperity
than ever before. With prosperity came change. People began to create new forms
of music and literature. New fashions became the rage. The writer F. Scott
Fitzgerald, whose novels and stories captured the spirit of the decade, called
it the “Jazz Age.” Others called it the “Roaring Twenties.”
The 1920s was also a time of conflict.
Some Americans, alarmed by rapid changes in values and behavior, struggled to
hold on to more familiar ideas and ways of life.
Chapter 3
World War I and its influence on the post-war
life of the USA
In the beginning of World War I,
President of the United States Woodrow Wilson tried to follow the policy of
avoiding involvement in some dangerous conflicts in Europe. He hoped the United States would not play the role of mediator to help bring peace to Europe. So, America was not going to enter this war, and kept neutrality.
Only something extraordinary could make
the United States interfere this this bloody war. And soon the reason occurred.
The passenger steam – ship “Lusitania” was torpedoed by the German submarine on
May 7,1915. This tragic event took the lives of 1.198 people, including 128
American citizens.
Americans were outraged, and President
Wilson lodged a strong protest with the German government. Although the Lusitania was in fact carrying arms and explosives to England, Germany apologized, offered
to pay damages, and promised not to sink passenger vessels in future.
After the sinking of the Lusitania, Wilson realized that the United States could not remain neutral much longer. At
his urging in 1916 Congress passed a series of measures designed to prepare the
United States to defend itself from the Central Powers.
The National Defense Act doubled the
size of the army, and the Naval Appropriations Bill provided money to build
warships. The Council of National Defense was formed to direct and control the
supply of the nation’s industries and natural resources.
To raise a large army on short notice, Congress
passed the Selective Service Act on May 18, 1917. The “draft” required man
between ages of 21 and 30(later between 18 and 45) to register for military. By
war’s end 4 million men were in army, half of whom served overseas.
From
the very beginning of the American military action in Europe it was clear that
it was going to be costly. To help finance this unexpected expense, in October
1917 Congress passed the War Revenue Act, increasing income taxes.
The government also raised money by
selling liberty bonds. Politicians and movie stars gave speeches urging people
to buy bonds. Some 21 million Americans bought bonds – in effect, loaning money
to the government. Through these measures, and by increasing taxes on
corporations and on goods such as alcohol and tobacco, the government raised
$10.8 billion.
The war also placed extraordinary
demands on American industry. Almost overnight, factories began producing great
quantities of tanks, airplanes, guns, and other war materials. The dramatic
increase in production would not have been possible without the dedication of
factory workers. Samuel Gompers and other labor leaders pledged their support,
and union members did the rest. During the war, union membership rose from 2.74
million in 1916 to 4.05 million in 1919.
More than 1 million women entered the
work force, often taking the jobs of men who had joined the military. They
drove trucks, delivered mail, and made ammunition.
The war also brought many more African
Americans into work force. Northern industries sent agents to the South,
looking for workers. By 1917, responding to promises of good salaries and fair
treatment, as many as half a million black workers had moved north to take
factory jobs.
Although most Americans threw themselves
into the war effort, a few held back. Some people firmly believed that the
nation should stay out of Europe’s wars. Others were pacifists. There were
about 20.000 pacifists to be drafted.
Afraid that the opposition would hurt
the war effort, Congress passed the Espionage Act in June 1917. The act set
strict penalties for anyone who interfered with recruiting soldiers or made
statements that might hinder the war effort.
The Sedition Act of May 16, 1918, made
it illegal to utter disloyal statements about the Constitution, the government,
the flag or the armed forces. In 1919 the Supreme Court ruled that the
government had the right to suspend free speech during wartime.
During the war, American industry had
focused on producing weapons and supplies. With the war over pent – up demands
for goods, and for better wages and working hours were unleashed.
However, factories that had been
producing war materials could not immediately change to making clothing, shoes,
cars, and other goods that a peacetime population demanded. Prices for these
scarce products rose. Meanwhile, returning soldiers, looking for places to
live, drove up the cost of housing. By 1920 prices were twice as high as in
1914.
As rents and prices rose, however workers’
wages remained low. During the war American workers had not gone on strike so
as not to hurt the war effort. It was now time, they believed, to push for
higher wages and workdays shorter than 12 hours.
In 1919 union leaders across the nation
led workers out on strike. While early strikes succeeded, workers faced growing
opposition as the year wore on.
When shipyard workers in Seattle walked off their jobs, other unions in the city showed support by striking, too. Seattle’s mayor turned the public against the strikers claiming their leaders they are
radical and extremists.
In Pennsylvania and the Midwest, striking steelworkers called for an end to 12 – hour workdays and 7-day workweeks.
Steel mill owners ignored their demands. They also accused the strikers of
being linked with radicals. Whether the accusations were true or not, political
leaders and newspapers turned against the workers and sided with business
leaders.
After four months the striking
steelworkers gave up. This failure dealt a crushing blow to the union movement.
Racial unrest
The tense mood of the nation was seen in
racial violence as well. In 1919 white mobs terrorized black communities from Texas to Washington D.C. Black tenant farmers in Arkansas were attacked for attempting to
form a union. In Chicago a white mob stoned to death a black swimmer who had
strayed into a “white section” of a beach on Lake Michigan. In the violence
which followed, 38 people were killed.
Faced with such attacks, and thousands
of lynchings since 1890, African Americans launched an anti-lynching campaign.
In this campaign, the National Association for the Advancement of Colored
People called on Congress to make lynching a federal crime. The Senate,
however, refused.
Despite its failure in Congress the
National Association continued to bring attention to the issue of lynchings. It
won several victories in the 1920s, as when a court struck down an Oklahoma law denying blacks the right to vote.
Chapter 4
The Great Depression
1.The beginning of the Great depression
and its reasons.
Business began to slow in the fall 1929.
The value of stocks drifted down. The decline prompted some people predict that
the economic boom was coming to an end.
The greatest economic depression in the world’s history started in 1929. The
stock market – source of the profit for the biggest part of the population of
the United States crashed on October 29, 1929. It was the worst day in Stock
Market history. People lost most of their monetary savings. Most of the banks
crashed too. Most of the stocks became very cheap and everyone wanted to get
rid of them, but no one wanted to buy them. Panic in every life area started.
Unemployment, panic, chaos, together with wrong politics of the government made
this depression more serious than it could be.
Herbert Hoover was the President of the United States in the beginning of the Great Depression. His policy was wrong from the very
beginning. He thought that this crisis is not very serious, and America would overcome it easily. It was his main mistake. It was silly to underestimate
this problem. That is why people didn’t elect him as the President for the
second time. The person that got people’s sympathy was Franklin Delano
Roosevelt. He felt that the country needed serious changes to overcome. Herbert
Hoover didn’t share Roosevelt’s viewing of the situation in the country, so he
became a rough opposition to Roosevelt. In his turn Roosevelt promised the New
Deal to his country that would help to rebuild American business that was in
deep knockout after the beginning of the Depression.
Three problems were main causes of the
Great Depression.
The first problem was that farmers grew
more crops than could sell them. They sold crops for less money than they spent
to plant it. So many farmers didn’t earn enough to pay for their farms.
The second problem was that factories
were making too many products. Americans had no money to buy all the products
that were being made in the USA. Factory owners sold their products for less
and less money. Many factories were forced to close. Thousands of workers lost
their jobs. Unemployment had reached its apogee.
The third problem was that workers were not earning enough money. Prices for
everything became lower and lower. Soon almost everyone was losing lots of
money.
All these problems caused different
consequences: hunger, poverty, unemployment and closing of many factories and
companies.
2. Roosevelt and his “NEW DEAL”.
Just before Roosevelt entered office on
March 4, 1933, a bank panic swept the country. Thousands of banks failed,
people lost their money. They rushed to the banks to get their money out. It
became difficult because everyone wanted to do it and completely no one had
time to do it. Banks crashed before people had to get their money. Thousands of
unsound banks crashed. Millions of dollars disappeared. People were very
dissatisfied. Their dissatisfaction influenced the government policy. Roosevelt made a really wise step. He understood that it was difficult even for sound banks
to meet the demands. He decided to close all banks for a special bank holiday.
When it was time for them to open, he allowed opening only sound banks. This
crisis was very difficult and hard but Roosevelt found the way to overcome the
problem. Some banks loaned money from government or bank which had better
situation and most of them reopened for business. This action and a series of
“fireside chats” gave the people new confidence. The first months of Roosevelt’s administration were very busy. During a period of about one hundred days Congress
passed many new laws to provide relief and to promote recovery.
1.
Gold
ceased to circulate as money, and paper dollars were issued. People could repay
debts more easily with the new paper money.
2.
The
Securities Act of 1933 provided for government supervision of the issuance of
new stock. An act passed in 1934 created the Securities and Exchange
Commission, which regulates the sale of the stock.
3.
A new
farm program was created by the Agricultural Adjustment Act (AAA). The AAA
raised prices for farm produce to pre – World War I levels. In return for price
supports farmers had to agree to reduce production.
4.
The
Tennessee Valley Authority (TVA) began constructing dams on the Tennessee River electrical power. The TVA sponsored many programs for improving life in a
large area of the South.
5.
The
National Industrial Recovery Act (NIRA) set up the National Recovery
Administration (NRA) to aid industry and labor. The program tried to help get
higher prices for industry and higher wages for labor. The American people were
encouraged to buy from stores that displayed the Blue Edge, a sign which
indicated participation in NRA programs. The Public Works Administration (PWA),
created by the same act as the NRA, provided jobs by financing the construction
of roads and other public works.
6.
The
Civilian Conversion Corps (CCC) provided government jobs for unemployed youths.
Much of their work was devoted to planting trees, protecting, and building
parks.
7.
The
federal Emergency Relief Administration (FERA) provided direct aid to the
unemployed.
In 1935 the New Deal was concentrated
more on reform than on recovery. Roosevelt wanted to deal with the causes of
the Great Depression. He wanted American wealth to be distributed more equally.
This required the passage of several new laws. The Revenue Act of 1935|
provided a national pension system, unemployment insurance, and benefits to the
wives and families of deceased workers. The National Labor Relations Board
(NLRB) gave labor unions the opportunity to win better wages.
In July 1935 Congress passed Labor
Relations Act. Known as the Wagner Act – after senator Robert E. Wagner, who
introduced it – it strengthened the power of the labor unions.
The Wagner Act helped workers by
outlawing unfair practices. Employers could no longer refuse no bargain with
union representatives or prevent workers from joining unions. The act set up
National Labor Relations Board (NLRB) which gave labor unions the opportunity
to win better wages.
Probably the hardest battle of the New
Deal was fought over the Social Security Act. Many people opposed such a plan
because of its costs to businesses.
Roosevelt wanted everyone to be included,
however. Frances Perkins, Secretary of Labor and the first woman ever appointed
to a President’s cabinet knew that many people were against such a sweeping
bill. In 1935 she drew up the first Social Security Act. The plan was a form of
insurance. Employers and workers would pay taxes to create funds to cover
unemployment benefits, old-age pensions, programs for children or insured
workers who died. The bill covered only about half the work force. Farm and
domestic workers were left out. Despite these limits, however, it gave millions
of workers a sense of security.
The New Deal succeeded in putting many
people back to work It gave recovery to the farmers and to businesses. But
recovery was slow and painful.
3. Government’s efforts to reduce
immigration to the USA.
Efforts to limit immigration had begun
early in the decade. In 1921 Congress passed an act limiting the number of
immigrants from eastern and southern Europe – the Europeans most anxious to
come to the United States.
In 1924 and 1929 Congress imposed even
more restrictions on immigrants. Thus, the nation’s history of nearly unlimited
European immigration came to an end. Meanwhile, most Asian immigration was
still banned.
Anti-immigration laws, however, did not
apply to people from Americas. Nearly 500.000 people immigrated from Mexico in the 1920s, and 950.000 from Canada. Most Mexicans migrated to the Southwest, where their
labors played a vital role in the growth of farmlands, railroads, and mines.
As the anti-immigrant mood gripped the
nation, an old organization took on new life. Leaders of the Ku Klux Klan,
which had terrorized black southerners during Reconstruction, saw a chance to
expand the Klan’s strength beyond its base in South.
In 1920 the Klan hired two sales agents
to help achieve its goal. In a public campaign boosting “100 percent pure
Americanism,” they directed hatred against anyone who was not white or
Protestant. White – hooded Klansmen and their wives now terrorized Catholics,
Jews, Asians, and immigrants as well as African Americans.
By 1925 the Klan had as many as 5
million members. They helped elect five United States senators and four state
governors – in northern as well as southern states.
However, the Klan’s increasing violence
began to weaken its appeal. When a Klan leader was convicted of murder in 1925,
membership began to drop. By 1930 the Klan had only 50.000 members.
4. Opposition to the New Deal.
There were some people that were unsatisfied
with the politics of the new
government. Some of them thought that
government was not doing enough. Senator Huey P. Long of Louisiana proposed a
Share Our wealth plan which would redistribute the country’s wealth. Dr.
Francis Townsend of California wanted the government to give everyone over
sixty years of age a pension of two hundred dollars per month. Both men had
many supporters. Such demands had a great deal of influence of the establishment
of the Social Security system.
Criticism of the New Deal also came from
those who felt that government was doing too much. The United States Supreme
Court decided that some of the new laws, including the AAA and the NIRA, were
unconstitutional. Roosevelt thought otherwise. He tried to increase the number
of justices on the Supreme Court. He asked Congress to pass a law allowing him
to do this. He hoped to appoint enough new justices to the Court to swing its
decisions in favor of the New Deal. Roosevelt’s plan failed. But because of
vacancies which Roosevelt filled, and changing opinions among the justices, the
Court soon came to accept the new programs.
There were many objections to the New
Deal. Many business operators resented government interference. Some of them
disliked Roosevelt so much that they would not speak his name, referring him
profanely as “that man” in the White House. The huge emergency programs which
made work for people to do were criticized for being wasteful. The Works
Progress Administration (WPA), which spent $11 billion in some four years
giving people work, was called by its critics the “we piddle around” agency.
5. The role of the New Deal in
coping with the Depression.
As a whole, the New Deal was only partly
successful. By 1938, problems still remained high. Unemployment remained high.
As the number of jobs declined, women, blacks, and other minorities were most
often the last hired and the and the first fired. They found themselves
excluded from jobs by employers, unions, and even by government policies. Only
the increased demand for goods and workers caused by the World War II brought
full recovery. But the New Deal did accomplish something. It held the American
people together. Dictators arose in many countries. However, the United States dealt with the depression without giving up its ideals of government. The New
Deal did, however, bring a new era if not a revolution in American life. Since
the 1930s government has had the responsibility of providing a sound, healthy
economy. The government is called upon to reduce unemployment compensation to
those who cannot find work, give aid to the elderly, support the price of farm
produce, help individuals obtain better housing, and promote quality education.
The role of the government changed under the New Deal from noninvolvement to
total involvement. The New Deal pointed the nation in the direction it is
following today.
Conclusions
While investigating this theme, I have
come to the following conclusions:
1.
Life had greatly changed in America after the Civil War of 1861- 1865. By the
end
of the XIX-th century, the American economy was blooming and prosperity was
spreading. The centre of social life moved from farms to cities. Big factories
were constructed, big business rose. America was becoming a more powerful
industrial power. The reform movement was taking place in all spheres of the USA, and the people who were involved in these reforms were called the Progressives.
Progressivism was founded upon the belief that all social problems could be
solved through science and enlightened government actions. The role of the
government changed: it became more interested in the life of each individual,
and working people began to get support from their government. The political
system, foreign, social and immigration policies changed in the country.
2.
The new inventions, made in the end of the 19-th and the beginning of the 20-th
centuries, had greatly changed the life of the United States. The life in the
country became more comfortable and convenient and Americans got in the know of
the latest use in the country and abroad with the telephone, the radio,
electricity, automobiles, the telegraph, the gramophone, new appliances for the
home, the conveyor line, clothes and footwear producing equipment, etc.
Besides, labor productivity had increased to a considerable extent due to the
new machines and modern technology introduced into the process of producing
goods.
3.
During the first two decades of the XX century the rise of economy had achieved
a very high level. The railroads played a very important role in it. They were
covering the whole country that stimulated the industrial rise of the country
and intensive use of natural resources. Whatever the industrial revolution needed,
the railroads could now deliver it to any place of the country.
People
started to pioneer in different fields of business, such as oil refining, steel
industry, electric power stations, etc. Efficient using of natural resources,
fast exploring of new technologies, professionalism of people working in
American industry soon made the United States the world’s economic leader.
4. As the USA was being industrialized and broadened its trade links, a group of men emerged who
would dominate the economic future of the country. These were the industrial
giants. They had a sense of vision to see opportunities for production and
marketing where others had not. And they had the willingness to take risks. The
industrial giants were able to use new inventions and corporate systems to make
production costs lower and provide products and services to growing numbers of
consumers. They were Andrew Carnegie, John D. Rockefeller, J. P. Morgan, Henry
Ford, etc.
5.
World War I had greatly influenced the life of the USA. It became the reason of
several serious problems in the society. They appeared well before the severe
recession but in the course of time they finally led the country to the
collapse-the Great Depression of 1929-1939.
First
of all, half of the industrial workers lived in poverty and their
dissatisfaction with their life was constantly growing.
The
racial climate had become very intensive. Racial violence and hatred were
growing. Racial discrimination became the reason of high level of unemployment
among minorities. The anti-immigration laws made by the government in order to
reduce the number of immigrants in country inspired the immigrants’
dissatisfaction and activated the Unions’. All this resulted in strikes and
riots against the government politics.
The economy
was unstable: the gross national product declined, some businesses went
bankrupt, thousands of farmers lost their land and millions of American workers
lost their jobs. As a result, there was a dramatic increase of labor unrest.
6.
But during the 1920s it still seemed as if prosperity would go on forever. It
was the decade of significant, even dramatic social, economic and political
change.
Salaries
rose, and working hours decreased. Americans had the resources and the leisure
time to pursue new forms of entertainment: going to movies and sporting events,
visiting restaurants and bars, dancing to jazz music and doing the shopping,
gambling, etc. Though alcohol was prohibited, it was smuggled across state
borders. This period of time is called “the Roaring Twenties” or the “New
Era”. It was the time in which American culture reshaped itself to reflect all
the changes in the society. It was also an age in which America was becoming a modern nation.
7.
The autumn of 1929 began with alarming declines in stock prices and the stock
market crash that followed. It was the beginning of the Great Depression.
The
causes of this severe crisis were:
-
the US prosperity depended on a few basic industries, mostly construction and automobile but
newer industries hadn’t yet developed enough;
-
most
families were too poor to buy the goods of the industrial economy;
-
the
credit structure of the economy was in trouble: farmers were deeply in debt but
crop prices were too low to allow them pay off what they owed; when the market
crashed, some of the nation’s biggest banks failed;
-
late in
the 1920s America’s position in international trade was
bad-European demand for American goods began to decline
as European economy was destabilized after World War I;
-
after WWI
all allied with the USA nations owed large sums of money to American banks but
they were not able to pay their debts because of economic troubles in their
countries.
8. The government began working to see
how it could end the Great Depression. President Franklin D. Roosevelt had
written a plan called the “New Deal”. The main aim was to create jobs
through projects such as building highways, dams, bridges, planting parks, etc.
The men who worked on these projects were paid by the government. But the government
was just as poor as someone else. In a risky move, it began to spend more money
than it had. Printing so much money was causing the inflation, going of the
value of the dollar. This has troubled the American economy ever since. Though
the government helped people temporarily during the Depression, some of the
policies set up than have caused serious problems that are still with Americans
today. Sometimes it seemed as though the Great Depression would never end,
although by the late 1930s things were improving a little. Men found jobs again
and earned money to buy food, clothes and other products. But only in America went to World War II, did the last traces of the Great Depression disappear.
Appendix
1.
Glossary
1.
Depression
– депрессия
2.
Inflation
– инфляция
3.
Stagnation
– стагнация
4.
Amendment
– поправка
5.
Unemployment
– безработица
6.
Employer
– работодатель
7.
Railroad
– железная
дорога
8.
Trade
Unions – организация
рабочих , профсоюзы
9.
Racial Unrests – бунты на почве национальной розни
10.
Economy
– экономия
11.
Conditions
– условия
12.
To
sustain –
продолжать
13.
Policy
– политика
14.
Predictable- предсказуемое
15.
Phenomenon
– явление
16.
Adequate
– адекватный
17.
Development
– развитие
18.
Tendencies - тенденции
19.
Immigrant – иммигрант
20.
Influence
- влияние
21.
Supervision – управление
22.
Government
–
правительство
23.
Significant
– существенный
24.
Entertainment
– развлекательный
25.
Approaches
– подходы
26.
Sound
– нормальные
27.
To
decrease – уменьшаться
28.
To
increase – увеличиваться
29.
To
reflect – размышлять
2.
References
1.
Bernstein V. America’s story. – Steck-Vaughn Company.: 1995
2.
H C. Dethloff & A E. Begnaud. – Steck-Vaughn Company.: 1986
3.
Herman J. Viola. Why we remember. Addison – Wesley Publishing
Company.: 1998
4.
American History. - Beka Book Publications.: 1990