One of the major falls of the United States of America as a nation was the great depression triggered by the Stock Market crash of October 29, 1929, the Black Tuesday. Extending to the early 1940s this was the period of extreme tragedy. The great depression also saw the beginning of government intervention in the economy as well as the society.
Though triggered by the stock market crash, the roots of the depression lied in the very functioning of the economy. The US industries saw immense growth producing more than what the wage earners and farmers of the country could actually consume. The rich becoming richer invested more in stocks and other similar markets run by speculations thereby, losing all their money when the market crashed.
In spite of some profits made on the stock market, American truly entered the great depression by the end of 1930. This period saw the failure of around 9000 banks. Having invested huge portions of their client’s money in the stock market these banks had no choice but to close. Some other surviving banks could not make it thanks to the frantic public who withdrew their money in an attempt to save themselves.
The surviving few banks were now not keen on offering loans. This greatly affected the businesses most of which have already suffered huge losses during the stock market crash. Businesses started cutting back on their worker’s wages and working hours. With less money in their hands consumers started to refrain from spending. This formed a vicious cycle leading to more businesses cutting back on the wages and more people living on stringent budgets. This finally led to businesses closing down pushing the American population in to unemployment.
Contrary to the outcomes of the previous depressions the farmers also suffered during the Great Depression. The invention of the tractor had already caused unemployment in this sector. Adding to the crisis was the effect of overgrazing and drought leaving the farmers with no crops even to feed themselves.
The aimless US population started travelling from town to town in search of work. Jobs were rare and for every job opening there were thousands of people applying. The unlucky ones often stayed in a shantytown also called Hoovervilles located outside of town. Any material that is found freely like cardboard, newspapers, driftwood etc were utilized to make housing in shantytown. Hoovervilles was named after the President Herbert Hoover whom people blamed for the Great Depression. Hoover Flags – empty pockets turned inside out – Hoover blankets – newspapers – and Hoover Wagons – broken down cars pulled by horses – clearly expressed the hostility of the population of America towards President Herbert Hoover.
The presidential election of 1932 saw Franklin D. Roosevelt winning with a huge majority. The New Deal refers to the various programs established by President Roosevelt in an attempt to pull the United States of America out of the great depression. Roosevelt started by closing all the banks and allowing them to reopen only after their stabilization. The Agricultural Adjustment Administration (AAA) was a program aimed at helping the farmers. The Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA) were two other programs of the New Deal that aimed at curbing unemployment.
The New Deal did bring about significant increase in production and eased the hardships of the Great Depression but it was not enough end the depression. The US economy emerged out of the Great Depression after it entered into World War II resulting in a large fraction of its population becoming soldiers. With more men fighting the war women kept the factories going. Food production increased in an attempt to feed people at the home front as well as to send overseas… slowly pulling the great economy out of The Great Depression.