John Law: The Great Depression And The New Deal

“Money makes the world go round.” This adage is as true present day as it ever was. The ever-changing global economy is interdependent on technology, as it has evolved from inventions such as paper money and the modern assembly line and, when economies fail, the impact is worldwide. The stock market was an essential part of the American economy, and when it failed the effects lasted for many decades. John Law was born in Edinburg, Scotland on April 21, 1671, into a wealthy family. His father was a goldsmith and also a banker. His mother was a relative of the Duke of Argyll. Since his mother knew the Duke, an influential part of society, John was able to enter the best schools to study theoretical and economics. People listened to what Law
had to say because he was an intelligent man who was also very handsome (“John Law”). When Law came back to France from Amsterdam, he wanted to start the use of paper money. The French Government did not like his idea of paper money, so they rejected his proposal. After Law was rejected, he traveled to Turin, Italy to try to convince the Duke of Savoy to create a national bank. The Duke was very impressed (“John Law”), but he also rejected his idea. After being rejected, Law traveled back to France and was introduced to Duc d'Orlèans. The Duke gave Law a grant to start his own bank, the Banque Gènèrale. Paper currency was first used in the 1800’s (“Banque Gènèrale”). As the founder of the bank, he used his position to introduce paper money as currency in France (“John Law”). This was the first bank to introduce paper money (“John Law”). His persistence with the idea of paper currency gave rise to modern day currency and banking. Paper money was a success because it didn't cost as much as gold and silver coins, but also they could print money faster and cheaper. In the same way John Law’s ideas changed banking and currency, Henry Ford’s ideas revolutionized the automobile industry. Henry Ford was a very important man in history. He invented the Model-T. He also perfected the use of the assembly line in the manufacturing industry, making the cars he produced affordable for all people. Henry Ford lived in Greenfield Township, Michigan, which is now known as Dearborn. He was born on July 30, 1863, and was the youngest of eight children. His mother’s name was Mary, and his father’s name was William. Henry's father’s died when he was only twelve years old. While Ford was in school, he was great with mechanics. When he was fifteen, he started working as an expert watchmaker. Henry wanted to leave his farm and work with machines for a living. Ford Motor Company was founded in Ford's hometown of Dearborn, Michigan. The company was founded in 1903. Ford started selling Model-Ts in 1908. He sold 15 million Model-Ts over the next 20 years (“Ford Motor Company”). He was the first to use the assembly line and mass production in the automobile industry (“Ford Motor Company”). Ford did not invent the car, he simply made the car more affordable for common people. By decreasing production costs with his efficient assembly line, the price of the Model-T decreased from $950 to $290 from 1909 to 1926 (“Henry Ford”). He offered "installment credit plans" for people who could not afford a car (“Motorizing America”). This made it possible for anyone working to get the Model-T. The assembly line reduced the amount of hours it took to make a Model-T. The worker on the assembly line had to do the same thing repetitively making them efficient at their job.
This method made Henry Ford famous around the world. Ford published that he was going to pay his employees significantly more than other manufacturers (“Henry Ford”). This announcement made the news headlines across the country. He wanted his workers to be able to afford the price of the new Model-T car that they were making. He offered his workers five dollars per day which was three dollars more than the minimum wage anywhere else, making his factories the place to work for in the early 1900’s (“Henry Ford”). At that time, Ford had around 13,000 employees (“Henry Ford”). Between 1920 and 1929, the production of automobiles grew from 2.2 million up to 5.5 million (“Motorizing America”). There were so many cars being produced, by 1929 there was one automobile for five people (“Motorizing America”). In 1900, the automobile industry was the 150th largest industry in the United States economy (“Motorizing America”). Thanks to the work of Henry Ford, by 1925 it was the largest industry in our country (“Motorizing America”). The boom in the automobile industry led to growth in many other areas as well. Rubber was needed for the manufacturing of tires and other parts of the car. The tire industry grew along with the automobile industries. Roads were built to accommodate the fast growing number of cars leading to growth in the construction industry. Gasoline was needed for fuel. Oil refineries and gasoline stations were built to keep up the pace with the number of people driving. Ford Motor Company become a private company after a controversy with shareholders. The company bought Lincoln in 1922, and Mercury was founded in 1932. Ford branched out and started the Ford Air Transportation Service, which held the first air mail (“Ford Motor Company”). Thanks to Henry Ford’s ideas and business sense, many other industries and the United States, for that matter, grew. Ford went around the world with pacifist delegates to many countries in Europe during WWI (“Henry Ford”). The movement he sponsored was called the “peace ship.” Ford's factories helped build many tanks, trucks, airplane motors, submarines, and armaments for the US during the war. He did all of this without profit (“Henry Ford”). In the 1920’s, the stock market was an important part of the American economy. The market was booming during this time. The people who had invested in the stock market were not truly educated on how it worked. People depended on the market for their daily lives, even with the risks involved. If it went down, their savings did too. The stock market was not just one entity, it was many, but the main one was the New York Stock Exchange. During the 20th century, The New York Stock Exchange was the biggest market for corporate equities. This business was worth a total of 14 trillion dollars and this organization was located close to Wall Street in Manhattan (“NYSE”). The 1920's was a time of high stock value and happy families. September 3, 1929, stocks were the highest they had even been in ten years (“Stock Market Crash”). The fall of the stock market happened quickly and randomly. Many investors were trying to get the money that they lost back. October 18, 1929 was the day when the shares dropped rapidly. During the 1920's, the US's economy was growing and doing very well. Even after World War I, the economy was doing great. Many families were doing great thanks to credit or the credit card. What they didn't know was that their life was about to take a turn for the worst. When the US Stock Market crashed, European economies were also descending into depression. The US had invested in many European countries, so when the Stock Market crash in the US, the US's investment in Europe declined very quickly. Before the stock market crashed in
1929, the US was loaning money to European countries. This ended at the beginning of the Great Depression. Europe also fell into an economic depression. In both countries, people started to run to the banks to get their money out. Bank runs often occur when the economy falls. A bank run is when people rush to remove their money from their accounts, but the bank does not have the money to give them. FDR founded the Federal Insurance Corporation or FDIC in 1933. This organization said that if you deposited money in the bank, you could always withdraw it, even during an economic crisis (“Bank Runs”). Before this cooperation, the banks had no money to give to the people who wanted to take money out of their accounts (“Bank Runs”). Therefore, when the Stock Market crashed, and people went to withdraw their money from the banks, there was no money there. Many people lost their entire fortunes when the Stock market crashed. After the Stock Market crashed on October 29, 1929, the US went into a period called the Great Depression.
The Depression was a time of great heartache for people because they had little money. On October 24, 1929, the Stock Market began to fall, leading to widespread panic. For on this day, the stocks were plummeting faster than anyone had ever seen. The worst of these days was October 29, 1929, which was the start of the Great Depression. The Great Depression was a difficult time for industrial companies. The output of products was cut in half during the 1930’s ("The Great Depression and the New Deal."). When the industrial companies fell, this put 15 million people out of work, which was one-fourth of the US labor force ("The Great Depression and the New Deal."). Wages dropped by 50 percent. Many banks had to close. The food supply was the lowest in the country since the Civil War. About 90,000 companies had to shut down, causing many people to lose their jobs ("The Great Depression and the New Deal."). Governments of the US and Great Britain focused on the economic problems and tried to come up with a solution. Also, they tried to help the unemployed and hungry. Both of
these countries did it the right way; they focused on the problem instead of blaming others. Germany, Austria, and Italy, on the other hand, started blaming people like the Jews and international bankers. In response to the Stock Market crash, many banks in Austria and Germany closed their doors, leaving people scared and angry. In response to this situation, Hitler started the Nazi Party in Germany. The people of Germany were willing to elect Adolf Hitler to lead them because they were impoverished and angry. The Soviet Union also suffered great hardship during this time, including the great famine during 1932. Many efforts were made to correct the economy; however, they failed. Franklin D.
Roosevelt was considered by many to be a great president. He led our country through tough and dangerous times. One of his achievements was called the "New Deal.” There were two periods of new deals. The first New Deal started in 1933 and ended in 1935. The second New Deal began in 1935 and went through 1939. The first New Deal period was to produce quick reassurance and the creation of new banks and jobs. The second New Deal focused on small farmers and labor. This period encompassed the making of the Works Progress Administration and Social Security. Roosevelt served twelve years, four terms, as president. He was strongly loved by many, but also many people did not like him (“Franklin D. Roosevelt”) . He played a significant role in the Great Depression and WWII. He was the mastermind behind the American welfare state and involved the government in personal protection. No matter the economic position whether positive or negative it effects the world. Law’s idea for paper money was rejected by many kings and rulers. Because of him, we now have a modern version of paper money. Ford made the automobile more affordable because of the assembly line and mass production. Ford also introduced higher wages for his workers so they could afford the Model-T his workers were making. The Stock Market was an essential part of the American life, and when it crashed, the effects were catastrophic. The advancements in technology have affected the ever-changing global economy,
and when technologies and economies fail, the effects are devastatin