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American economy in the 1920s
American Economy 1920s
Economy in the 1920s research paper
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The Great Depression progressively got worse and then progressively got better. Coming in and out of the depression was not an over night thing, It included lots of planning and action. There were a few major causes of the Great Depression,. The United states had three consecutive conservative presidents in the 1920's Harding, Coolidge, and Hoover. They all believed in mechanization which in turn put thousands of people out of work, and the trickle down theory where the money that the rich spent was supposed to somehow make it’s way though the system to the poor. The money never made it so the poor had to find some way to get money and that was through loans from the banks. The poor had no way of making money which made it close to impossible to pay back the loans plus the interest thus, beginning the ban and loan crisis. Banks were closing rapidly because of the money loss. This led to the concentration of wealth the top two percent of the US owned sixty percent of the money and the rest of the people were poor. Mechanization caused massive over production which put the US in a strain because of it’s lack of consumers. So they cut production and raised prices which was still ineffective. With food being too expensive work, and housing was scarce the poor were forced to make housing. With a combination of mechanization, conservative presidents, concentration of the wealth because of the trickle down theory, and higher taxes on the poor, the poor worked harder and steadily got poorer. Mexican Americans got deported during the depression because they felt that they were taking all the jobs. Hoover’s response to the Depression was shaped his conservative Republican ideas. He thought that the poor were lazy and that the rich became rich because they worked hard. The believed in “Big Business”, and that the money would “trickle down” if the poor worked harder. He thought that the Depression would solve itself. He thought that big business would end the depression. So that’s why he didn’t take actions sooner in the Depression. Hoover waited too long to take action thus, resulting in him getting blamed for the Depression Roosevelt, unlike the presidents before him took action in an attempt to end the depression. When Roosevelt took office in 1933, the country was in the middle of the Great Depression.
Historians claim that Hoovers term during the depression was filled with false promises and accuse the president of doing nothing while the depression worsened. Along with worsening the debt and a fairly aggressive use of government it is clear his approach towards the situation was not the best. FDR’s approach would prove during his administration to suffice in the augmentation of the crisis. Although it seemed like a completely opposite presidency, many ideas came from his predecessor. Roosevelt’s team of advisors understood that much of what they produced and fashioned into the New Deal owed its origins to Hoover’s policies.
The symptoms of the Great Depression began during the World War I and the economic boom of the 1920s, which was built on a shaky foundation. As a result, the Great Depression remained inevitable due to poor economic diversification, uneven distribution of wealth and poor international debt structure. However, although the Depression shook much of American society and culture, the capitalist system survived, the American people remained receptive and the belief in the "American way of life" didn't falter throughout the long years of economic despair.
In the Roaring Twenties, people started buying household materials and stocks that they could not pay for in credit. Farmers, textile workers, and miners all got low wages. In 1929, the stock market crashed. All of these events started the Great Depression. During the beginning of the Great Depression, 9000 banks were closed, ending nine million savings accounts. This lead to the closing of eighty-six thousand businesses, a European depression, an overproduction of food, and a lowering of prices. It also led to more people going hungry, more homeless people, and much lower job wages. There was a 28% increase in the amount of homeless people from 1929 to 1933. And in the midst of the beginning of the Great Depression, President Hoover did nothing to improve the condition of the nation. In 1932, people decided that America needed a change. For the first time in twelve years, they elected a democratic president, President Franklin D. Roosevelt. Immediately he began to work on fixing the American economy. He closed all banks and began a series of laws called the New Laws. L...
One main cause of the depression was the overproduction of farming and factory goods. The nation was so over-productive that its citizens couldn't afford to pay for these goods because all of the money was going into production fees, and not salaries When Hoover enacted the Hawley-Smoot Tariff, U.S. goods acquired an enormously high 60% tax rate, this was part of the reason for the depression, since no other countries wanted to pay the high tariff rate just to buy goods from the United States. While Hoover thought that he was helping the economy with this tariff, it turns out that all he did was isolate the U.S. from Europe and other parts of the world that would normally trade with the United States. President Hoover also thought that the government shouldn't give the citizens any direct help, when in fact, that was exactly what they needed to do. Instead of going out into the community and directly helping people, Hoover thought that if he created “public works” like the Hoover Dam, he could create jobs, and help citizens ...
Hoover is also vilified repeatedly for his inaction with the Depression. His personal policy and his party’s policy were designed to let the country find its own way, for if it became dependent on government aide, it would be a weaker nation that if it found it’s own way. This was a flawed assumption on their behalf though, because even in the 1920’s, there was a movement from many of the nation’s younger voters advocating change.
At first Hoover opposed any relief efforts, but as the Depression worsened, he started a few farm assistance programs. Hoover hoped that theses farm programs would help the farmers’ situation with the low crop prices. Unfortunately farmers had to come dependent on this government handout. Hoover also started federal work projects such as the Grand Coulee Dam and the Hoover Dam. These projects provided many jobs for people and provided affordable hydroelectric power for people but the Great Depression was a much bigger problem than a few extra job openings could fix. Hoping that raising tariffs could help American business Hoover created the Hawley-Smoot Tarrif. This actually worsened economy and caused lower export rates. One of Hoover’s big mistakes was that he wouldn’t go off the gold standard. Hoov...
There were many causes for the Great Depression. The first and one of the largest was the stock market crash. Before 1929 the stock market was flourishing and everyone wanted to buy stocks. People were so confident in the stock market that they were buying “on margin”, which meant that brokers would lend them 10% of the money they invested (D1). The problems began when stocks were being over speculated. When people began to realize this, they began selling there shares. On October 29, 1929, 16 million shares were sold (D9). This day became known as “Black Thursday”, the day the stock market crashed (D12). The second reason was the overproduction of goods. Factories had already produced too many goods and now there was no demand for them. The government began to raise tariffs to protect Canadian industries but things only led downhill from there.
Roosevelt became the U.S. president in 1932; he made an attempt to stop the Great Depression by The New Deal, which was based on the idea that the government’s money can save the economy. The New Deal gave jobs for people in governmental projects and also saved the banks from the chaos. However, the new deal didn’t overcome the unemployment issue and the jobs given to the people were only for a short period of time. Also, most of the government’s project created lost much more money than it gained. To be specific, Roosevelt created the Tennessee Valley Authority, which was based on building dams and hydroelectric power, this employed up to 8.5 million Americans; however, the projected costed a huge amount of money and the people were unemployed after the work was done. Franklin’s attempt to end the great depression wasn’t as effective as World War II’s boom in industry and
There were numerous causes and effects of the Great Depression. It was a divergent distribution of wealth. The nation’s wealth increased extremely but they did not distribute it evenly. The economy didn’t have any way of paying the money back. It created a financial crisis when Europe couldn’t purchase goods from the United States. It was mandatory for Germany to pay for World War I due to the Treaty of Versailles. This debt made the United States pass the Forney-McCumber Act which created high tariffs. There were a variety of reasons as to why the Great Depression started.
After World War I, new technological improvements helped factories to produce higher quantities of goods using smaller amounts of employees. Fewer workers meant less money being redistributed to the consumers to purchase products. America didn’t have a necessity for this higher quantity of goods with less people receiving paychecks. Thusly, the age-old system of supply and demand began to wither because there were too many products with too few people who could afford them.
During the great Depression, many people in the city were unemployed. A third of American farmers lost their land and had to move to city to search for jobs. Many African Americans were unemployed in the south, since white have priority over the job market than African Americans, it’s harder for them to get a job. African American started to move to North to search, but little difference did it make. Many took the position as janitors, street cleaners, and domestic servants. Mexican American and Chinese American were no better off, whites started to take over those jobs for Mexican and Chinese American. Women started to search for jobs as their family needed the money.
However, even before the Depression, there were signs that Hoover was becoming more conservative. As Document A suggests, Hoover did not want to be considered completely laissez-faire. He seemed less determined to preserve the extremely capitalistic society of the 1920's which was run, often corruptly, by political machines, such as Tweed. However, the success of the American economy under the private interest beliefs of Harding and Coolidge required him to ensure that the lack of intervention ...
Herbert Hoover and Franklin Delano Roosevelt belonged to two different political parties, so it was inevitable that the two would handle the Great Depression differently. President Hoover, a Republican, dealt with the depression in a more conservative manner; in his eyes, the federal government should not intervene. President Roosevelt was a Democrat during the Great Depression. He took initiative and created governmental agencies to create jobs and therefore create and complete public service and infrastructure projects. President Roosevelt dealt with the depression in a better manner than Hoover.
In fact, Hoover is ranked 9th place in the worst presidents list, according to U.S. News. Perhaps of his shy and introverted personality, he decided not fix the Great Depression because he did not want to make the situation worse. Although, doing something is better than doing nothing. Also, he sent the Army to clear America’s WWI veterans from their campsite in Washington D.C. The infantry and cavalry paired with six tanks were ordered to clear out the veterans and their families, Hoover killed his own people. On the other hand, fortunately, Franklin Delano Roosevelt came into office on January 30th, 1882. Instead of doing nothing, FDR fought the Depression with his New Deal; which was a group of U.S.government programs whose purpose was to help the country recover from economic problems. The New Deal was a success and brought relief to many Americans. With this in mind, President Herbert Hoover’s presidency was a
President Franklin D. Roosevelt faced one of the biggest challenges ever when he was first inaugurated March 4, 1933. This was right in the hart of the depression. F.D.R. came up with the new deal to try and pull our country out of the depression. After his first new deal F.D.R. came up with the second new deal and 11 other plains of making the American people pull out of debt.