Papers On The Great Depression

Tucker Hickman
Ms. DeGreef
English IV
10 March 2017 The Great Depression The Great Depression (1929-1939) was the deepest and longest-lasting economic downfall in the history of the Western industrial world. In the United States, the Great Depression began soon after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of vital investors. Over the next several years, consumer spending and investment dropped, causing steep economic declines in industrial production output and rising levels of unemployment as failing companies laid off workers. By 1933, when the Great Depression reached its peak, some 13 to 15 million Americans were unemployed and nearly half of the country’s banks had collapsed.
Though the relief and reform measures that were put into place by President Franklin D. Roosevelt helped reduce the damaging effects of the Great Depression in the 1930s, the economy would make a full recovery until after 1939, when World War II kicked American industry into high gear successfully pulling it out. People overspent and the market crashed (History.com Staff). The American economy entered a normal and somewhat occasional recession during the summer of 1929, as consumer spending plummeted and unsold goods began to pile up tremendously, slowing production down.
At the same time, stock prices continued to rise, and by the fall of that year had reached levels that could not be justified by anticipated future earnings. On October 24, 1929, the stock market finally crashed, as investors began dumping all of their shares. A record 12.9 million shares were traded on that day, known as “Black Thursday.” Five days later, on “Black Tuesday” some 16 million shares were traded after another wave of panic swept Wall Street. Millions of shares ended up worthless, and those investors who had purchased stocks “on margin” (with borrowed money) were wiped out altogether (History.com
Staff). As consumer confidence disappeared at the peak of the stock market crash, the fall in spending and investments sent factories and other businesses to slow down productivity and construction. Many had begun to lay of their workers. For those who were privileged enough to stay employed, wages dropped and the power to buy decreased. Many were forced to buy with credit could not afford to and went into debt, and the number of foreclosures and repossessions steadily rose. Because the United States was in such disorder the value of the gold standard, which allied countries around the world in a currency exchange, helped spread the great depression from the United States throughout the entire world, especially in Europe (History.com Staff). By 1930, 4 million Americans searching for work could not find even the lowest paying jobs. The number of unemployment had ultimately risen to about 6 million in 1931. Not only that, the country’s industrial production was cut in half. Thousands of bread lines, soup kitchens were appearing in towns and cities, rising numbers of homeless people became more and more relevant in America. Many farmers (who had been stressed with their much of their own economic farming depression for much of the 1920s mainly due to long lasting drought and steadily falling food prices) could not even afford to harvest their own crops, and were constrained to leave the crops to rot in the fields while people elsewhere were being starving (History.com Staff). In the fall of 1930, one of four banking epidemics had just begun, as enormous numbers of investors lost assurance in the creditworthiness of their banks and absolutely demanded deposits in cash, obliging banks to liquidate loans in order to supplement their inadequate cash reserves on hand. Banking epidemics swept through America once again in the spring and fall of 1931 and the fall of 1932, and by early 1933 thousands of banks had to shut their doors across the United States. Having to deal with this horrific situation, President Hoover’s administration tried keeping the banks and other institutions afloat with government loans; the concept was that the banks would hopefully loan to businesses, which would be able to reemploy most of their workforce (History.com Staff). During the first World War, farmers worked very hard to produce record high crops and livestock. When prices plummeted they tried to produce even more to pay their debts, taxes and living expenses. Which led to over production ultimately crippling the economy. In the early 1930s prices dropped so low that many farmers went bankrupt and lost their farms. In some places, all you could get for a bushel of corn was just eight or ten messily cents. Some farm families began burning all of their corn rather than buying coal to burn in their stoves because corn was cheaper. Sometimes it smelled like popcorn from all the corn burning in the kitchen stoves on the countryside (John Hardman).
Some farmers became very angry and wanted the government to step in to keep farm families in their own homes. In Le Mars, Iowa, a mob of very angry farmers burst into a court room and yanked the judge from the bench. They then carried him out of the court room, drove him out of town into the country and tried to make him promise that he would not take any more cases in court that would cost a farm family its operation. When he refused, they threatened to hang him. Fortunately for him, the gang broke up and they left the judge in a dazed state. The governor of Iowa called out the National Guard who rounded up some of the leaders of the mob and jailed them (John Hardman).
In other surrounding areas around the state, farmers banded together much like a labor union and threatened to cut off any milk from getting from farms to towns and cities. They hoped that this would raise the price that farmers got for their products. They set up roadblocks on country roads and made any trucks carrying milk, cream, butter or other farm products to turn around and go back home. They called it “The Farm Strike.” Not all farmers joined with the movement, however, and the effort did not have any effect on prices of their goods (John Hardman).
Between 1932 and 1935, farm income was raised by more than 50 percent, but mostly because of federal programs set in place by the president.
During the exact same years that farmers were being told to actually take land out of production, which would remove most tenants and sharecroppers, the farm production was drastically reduced down due to severe water shortages that hit the Great Plains states. Intense winds and dust storms that ravaged the southern Great Plains was also common during these times. Now known as the "Dust Bowl," throughout the 193Os, but particularly from 1935 to 1938 The damages were enormous people and their animals were hurt, crops were obliterated, cars and machinery were rendered useless. Around 800,000 people; often called "Okies," left Arkansas, Texas, Missouri and Oklahoma during the 1930s and 1940s Most of these travelers headed for the west coast to California, the great land of promise and wonders. The migrants were not only farmers, but professionals as well, retailers and others whose lives were also affect and connected to the health and wellbeing of the farming operations. California did not live up to their expectations, however, as conditions in the “promise” state were just as bad if not worse as those in the original origin from which many of the migrants had tried to flee from. Pretty much every migrant was fighting for low paying seasonal jobs, such as picking field crops (John
Hardman).
In more ways farmers could sustain and be much better off than people residing in the city and towns. Farmers had the proper knowledge and resources to produce much of their own food supply while city dwellers could not. Just about every family in country raised massive food plots with healthy vegetables and canned many fruits from their orchards, or just even just one tree. They had the luxury of milk and cream from their own dairy cattle. Chickens could supply meat and eggs efficiently. If most wanted flour and sugar they had to buy it in 50-pound sacks to bake their own bread or other foods. In most farm families the wife made very simple, almost primitive clothing from the cloth of the flour and feed sacks they had to spare. They learned how to get by with the little money they could earn. But the banks and taxes they owed had to still be paid in cash. These were still very rough and stressful times on the farms and their weary families (Iowa Public Television. Staff).
Before the Great Depression, people declined and did not want to go on government welfare, it was defiantly a last option that nobody wanted to accept. The newspapers were publishing the names of everyone who had received any welfare payments, and people thought of welfare as a humiliation. However, in the face of starvation at home, some men realized they had to sign up for welfare payments. For most it was a very painful experience to try and deal with especially with the shame attached to it all (Iowa Public Television. Staff).
Families that lived in towns could not produce any of their own food to survive off of. Many people living in the city were often starving and freezing. Sometimes, but rarely there were soup kitchens in larger cities that provided free meals to the underprivileged. Winters were even tougher on many families especially because they could not afford to buy food, little own coal to heat their houses (Iowa Public Television. Staff). In 1931 the newly elected president, Franklin D. Roosevelt, brought a swift air of optimism and confidence, which quickly got the people fired up to the banner of his program. It was known as the New Deal. He was bound and determined to make important as well as effective changes while in office. Roosevelt moved swiftly to deal with the financial issue that the nation was facing. On his very first night in office, he told the Secretary of the Treasury, William Woodin to come up with and draft an emergency banking bill, and gave him less than five days to accomplish the hard set goal (John Hardman).
What was truly unique about the New Deal, however, was the swiftness that President Roosevelt had accomplished. What was previously taking generations had he done in a surprisingly short amount of time. Many of the reforms were quickly drawn and poorly thought out with some actually contradicting the others. During the entire New Deal era, the public never tried to criticize or argue with the decisions that were being made; in fact, the New Deal brought to the individual citizen a great deal of interest in government and politics John Hardman).
The federal government formed programs to put Americans to work. The Works Progress Administration (also known as WPA) hired many men to work on public parks, roads, bridges, swimming pools, buildings and other important projects that have shaped America to look like it does today. Teenage boys were also hired by the Civilian Conservation Corps (also known as CCC). They lived in shanty barracks that were not well built or comfortable. They were also given some adequate clothing, and provided with three free square meals. The little salary that they earned was often sent back to support their families. The CCC boys planted thousands of trees, helped build public parks, and did other projects to embellish and preserve natural areas of America (Iowa Public Television. Staff).
The Federal government passed a bill to help the farmers out. They were producing more than anyone was buying causing a surplus that was driving down all the prices further than before. The government passed the Agricultural Adjustment Act (AAA) of 1933 which set specific limits on how many crops and herds that the farmers could produce in a year. Those farmers who had agreed to limit production were paid a subsidy. Most farmers signed up willingly and soon government checks were rolling into rural mail boxes where the money could help pay many bank debts or tax payments (Iowa Public Television. Staff).
Although the AAA had been successful for the most part, it was abandoned in 1936 due to the taxes on food processors that was ultimately ruled unconstitutional. Six weeks later Congress decided to pass a far more effective farm-relief act, which gave the government authorization to make payments to farmers who would reduce the planting of soil-depleting crops, ultimately achieving crop reduction through soil conservation practices (John Hardman).
By 1940 nearly 6 million farmers had been receiving federal subsidizations under the farm relief act. The new act basically provided loans on additional crops, insurance for wheat and a planned system of storage was created to ensure a stable supply of food for the United States. The prices of agricultural commodities steadily rose, which left the farmers with a sense of economic stability, many were relieved (John Hardman). While the First World War had unknowingly set the country on a fast track to the depression, World War II would ultimately pull it out. The world the American people had tried to exclude after the First World War could not be kept forever at bay. Adolf Hitler and Franklin Roosevelt came to power within a few weeks of each other. Hitler was put in as the German chancellor on January 30, 1933. Roosevelt was inaugurated as President of the United States just some thirty-three days later, on March 4. Almost the entire history of Roosevelt’s presidency happened to unfold under the towering shadow of Hitler’s chancellorship and eventually the swelling belligerency of Japanese militarists. The struggles of the Great Depression and the accomplishments that were achieved and shortcomings of the New Deal, and of FDR, cannot be understood outside of that setting. Just as the story of the Great Depression is not simply the story of the American people in a moment with both danger and opportunity. The story of World War II is a tale of people around the world violently swept up in its frightful tragedy, though the Americans, as it happened, were lucky and were spared the worst of the war’s misfortunes (David M. Kennedy).
At the kickoff of his presidency, Franklin Roosevelt had not challenged the isolationist mood of his fellow countrymen, announcing in his first Inaugural Address that “our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy.’’ FDR worked ever harder to persuade Americans out of the idea that the world’s problems were none of their concern. His stress levels only increased under the restrictions and regulations of the several “Neutrality Laws” that Congress had passed between 1935 and 1939, and had finally succeeded at last in successfully securing passage of the Lend-Lease Act in March 1941. It obligating the plentiful economic and vast resources of the United States to the war against the feared Axis Powers of Germany, Japan, and Italy. Hitler deemed the Lend-Lease Act equivalent to a declaration of war. He was correct (David M. Kennedy). Not only were American war deaths more proportionate to population, about one-sixtieth those in the Soviet Union, and one-fourth those in Great Britain, but among all the major belligerents, the United States alone succeeded in expanding its economy even while producing extraordinary quantities of weapons of war and other supplies for itself and its allies. The civilian economies of both the Soviet Union and Great Britain significantly reduced by nearly one-third during that time of war. In the United States consumption expanded by nearly 15 percent. The war forever exiled the Depression and lit the economic after-burners that boosted the American economy to unprecedented heights of prosperity in the postwar decades (David M. Kennedy).