The Great Depression
Read this article about the Great Depression in the United States. In addition to introducing the various causes, the text also covers The New Deal, a bundle of legislation that pulled the country out of depression and was arguably responsible for fully modernizing the United States.
Introduction
In this famous 1936 photograph by Dorothea Lange, a destitute,
thirty-two-year-old mother of seven captures the agonies of the Great
Depression. Library of Congress.
Hard times had hit the United States before, but never had an economic crisis lasted so long or inflicted as much harm as the slump that followed the 1929 crash. After nearly a decade of supposed prosperity, the economy crashed to a halt. People suddenly stopped borrowing and buying. Industries built on debt-fueled purchases sold fewer goods. Retailers lowered prices and, when that did not attract enough buyers to turn profits, they laid off workers to lower labor costs. With so many people out of work and without income, shops sold even less, dropped their prices lower still, and then shed still more workers, creating a vicious downward cycle.
Four years after the crash, the Great Depression reached its lowest point: nearly one in four Americans who wanted a job could not find one and, of those who could, more than half had to settle for part-time work. Farmers could not make enough money from their crops to make harvesting worthwhile. Food rotted in the fields of a starving nation.
The needy drew down whatever savings they had, turned to their families, and sought out charities for public assistance. Soon they all were depleted. Unemployed workers and cash-strapped farmers could not defaulted on their debts, including their mortgages. Already over-extended banks, deprived of income, took savings accounts down with them when they closed. Fear-stricken observers went to their own banks and demanded their deposits. Banks that otherwise might have endured the crisis fell prey to panic, and shut down as well.
With so little being bought and sold, and so little lent and spent, with even bankers unable to lay their hands on money, the nation's economy ground nearly to a halt. None of the remedies adopted by the president or the Congress succeeded - not higher tariffs, nor restriction of immigration, nor sticking to sound money, nor expressions of confidence in the resilience of the American people. Whatever good these measures achieved, it was not enough.
In the 1932 presidential election, the incumbent president, Herbert Hoover, a Republican, promised that he would stand firm against those who, he said, would destroy the U.S. Constitution to restore the economy. Chief among these supposedly dangerous experimenters was the Democratic presidential nominee, New York governor Franklin D. Roosevelt, who began his campaign by pledging a New Deal for the American people.
The voters chose Roosevelt in a landslide, inaugurating a rapid and enduring transformation in the U.S. government. Even though the New Deal never achieved as much as its proponents hoped or its opponents feared, it did more than any other peacetime program to change how Americans saw their country.
Source: Stanford University Press, http://www.americanyawp.com/text/23-the-great-depression/
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