The Effects of the Great Depression
On October 29, 1929, the stock market crashed, pushing the America into the Great Depression, one of the most significant events in our nation’s history. The Depression ended the boom of the Roaring Twenties, causing fortunes and life savings to be wiped out in moments. Two months after the crash, over $40 billion dollars had been lost by stockholders. As the Depression went on, more Americans demanded that the government take action to help those who could not help themselves. The Depression would leave a lasting impact on the social, economic, and political aspects of American life. The Great Depression that began in the United States soon spread to other parts of the world.
It was a painful tidal wave of unemployment and inflation that spread across Europe, which was still crippled from World War I. Desperate for a solution, several countries exchanged freedom for the seductive words of dictators and monsters. Germany was a prime example of this, as Adolph Hitler rose to power like a proverbial pied piper. The desperation of countries such as Germany had many wondering what the fate of the United States would be. Socially, America was in a desperate tailspin.
Following the stock market crash and the continual sinking of the economy, many people who had previously been the wealthiest in the nation were now reduced to poverty. Their fortunes were brought to their knees by the stock market. Some men became so desperate that they took out life insurance policies on their lives and then killed themselves so that their families would be able to live off of the insurance money. According to an article from the History Channel, “By 1933, when the Great Depression reached its nadir, some 13 to 15 million Americans were unemployed and nearly half of the country’s banks had failed.” (The Great Depression) Some people in search of work became hobos, sneaking onto railroad cars because they could not afford to pay for transportation, in the hope of finding a job elsewhere in the country.
More often than not, there were just as disappointed in their new location then the last one they came from. People were growing increasingly desperate and demanded that the government take drastic action to counteract the Depression. Some Americans would consequently begin to embrace more radical solutions. During the Great Depression, socialistic ideas became increasingly popular. The American Socialist Party was gaining popularity every day and socialists such as Norman Thomas ran for political office. Besides a rise in socialistic ideas, there were also those who began advocating even more radical and dangerous solutions.
One such individual was Father Charles Coughlin, a popular radio talk show host with millions of listeners. He argued the Nazi Germany was the best example for the US to follow in order to get out of the Great Depression. His broadcasts were also heavily fascistic and anti-Semitic. Another example was Senator Huey P. Long of Louisiana, who also had a massive radio following. Many people considered him to be the virtual dictator of Louisiana.
He proposed his “Share Our Wealth” plan, which would give every American household $5,000 by placing high taxes on wealthy Americans. The appeal of these radio personalities reflected the growing political fallout against the government. There was tremendous political backlash for President Hoover and the Republicans. Many Americans perceived Hoover as being asleep at the wheel while the nation slid into the Depression. At first Hoover’s plan was precisely to do nothing. According to the History Channel, “Hoover.
.. believed that government should not directly intervene in the economy, and that it did not have the responsibility to create jobs or provide economic relief for its citizens.” (The Great Depression) As the Depression continued, however, he decided that he needed to take some kind of action. As a result, Hoover and Congress passed various laws such as the Federal Home Loan Bank Act, and the Emergency Relief and Construction Act.
Many Americans viewed this as too little too late. It certainly didn’t help Hoover’s image that, according to Cormac O’Brien, author of Secret Lives Of The US Presidents, “While the rest of the nation wallowed in hunger, those in the White House carried on like aristocracy. Both lunch and dinner usually required formal attire, and virtually every meal was a seven-course feast.” (Brien) Many Americans held Hoover personally responsible for the Depression. Communities of homeless people that soon sprang up during the Depression came to be known as “Hooverviles”.
It is no surprise than, that in the next presidential election, the public overwhelmingly voted for Democratic candidate Franklin Delano Roosevelt who campaigned as the guardian of the “forgotten man.” With FDR in office, the government would take a direct approach to handling the economy in the years to come. The FDR administration based several of their ideas on Hoover’s earlier attempts at government intervention in the economy and took it up a notch. During FDR’s first 100 days in office, he persuaded Congress to pass several major laws in order to combat the Depression. His first official act as president was to declare a national bank holiday.
All banks were closed and were re-opened after government inspectors declared them to be safe. This ended the epidemic of bank failures that was plaguing the nation. Later, Congress would authorize the creation of the Federal Deposit Insurance Corporation, which allowed the federal government to insure all bank accounts up to $5000. As the FDR administration progressed, several new government agencies were created to regulate the economy or provide jobs to unemployed Americans. Legislation such as the Agricultural Adjustment Act and the Farm Security Act gave the government the power to raise the prices that farmers received for their goods and control the amount of food farmers could produce. On the jobs front, programs such as the WPA and the CCC allowed the government to provide jobs to hundreds of people.
In addition, the FDR administration also abandoned the gold standard in order to encourage gradual inflation. The goal was to encourage inflation in order to lessen the burden of those who were in debt. FDR “ordered all private holdings of gold to be given to the Treasury”. In addition, it was also thought that the strict adherence to the gold standard at the beginning of the Depression was one of the reasons the Depression spread worldwide. According to the History Channel, “The adherence to the gold standard, which joined countries around the world in a fixed currency exchange, helped spread the Depression from the United States throughout the world, especially in Europe.” The Great Depression had a significant impact on the nation socially, politically, and economically.
By examining the Depression, it is can be clearly seen how much a single event can change the course of an entire nation, and even the world. While some nations in their desperation turned to dictators for guidance, the United States remained a democratic republic. Works Cited Brien, Cormac O’. “Secret Lives of the US Presidents.” Philadelphia : Quirk Books, 2009. 183.
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