On October 24,1929—"Black Thursday"—a wave of panic selling of stocks swept the New York Stock Exchange. Once started, the collapse of share and other security prices could not be halted. By 1932, thousands of banks and over 100,000 businesses had failed. Industrial production was cut in half, farm income had fallen by more than half, wages had decreased 60 percent, new investment was down 90 percent and one out of every four workers was unemployed.
The Republican president, Herbert Hoover, asked employers not to cut wages, and he tried to reduce interest rates and support farm prices. In 1932, he approved the creation of the Reconstruction Finance Corporation, which lent money to troubled banks.
But these measures were inadequate. To masses of unemployed workers, Hoover seemed uncaring and unable to help them. In the 1932 election, he was resoundingly defeated by Democrat Franklin D. Roosevelt, who promised "a New Deal for the American people."
Jaunty, optimistic and a commanding public speaker, Roosevelt, a former governor of New York State, was able to inspire public confidence as Hoover could not. "The only thing we have to fear is fear itself," Roosevelt stated at his inauguration and he took prompt action to deal with the emergency. Within
United States Navy three months—the historic "Hundred Days"—Roosevelt had rushed through Congress a great number of laws to aid the recovery of the economy. The Civilian Conservation Corps (CCC) put young men to work in reforestation and flood control projects. The Federal Emergency Relief Administration (FERA) aided state and local relief funds, which had been exhausted by the Depression. The Agricultural Adjustment Administration (AAA) paid farmers to reduce production, thus raising crop prices. The Tennessee Valley Authority (TVA) built a network of dams in the Tennessee River area, in the southeastern region of the United States, to generate electricity, control floods and manufacture fertilizer. And the National Recovery Administration (NRA) regulated "fair competition" among businesses and ensured bargaining rights and minimum wages for workers.
In 1935, the Social Security Act established contributory old-age and survivors' pensions, as well as a joint federal- state program of unemployment insurance. The Wagner Labor Relations Act banned unfair employer practices and protected the workers' right to collective bargaining.
The Works Progress Administration (WPA) was one of the most effective of the New Deal measures, probably because it was based on the belief, originating with the Puritans and almost universally accepted among later Americans, that working for one's livelihood is honorable and dignified, but receiving help which one doesn't earn— "charity"—is demeaning and robs people of their independence and their sense of self worth. Financed by taxes collected by the federal government, the WPA created millions of jobs by undertaking the construction of roads, bridges, airports, hospitals, parks and public buildings.
Roosevelt's New Deal programs did not end the Depression. Although the economy improved as a result of this program of government intervention, full recovery was finally brought about by the defense buildup prior to America's entering the Second World War.
On the eve of America's entry into World War II in 1941,
President Franklin Roosevelt (left) and British Prime Minister
Winston Churchill meet aboard ship and issue a declaration known as
the Atlantic Charter. Its principles were later reflected in the Charter of the United Nations.
WORLD WAR II
In September 1939, war erupted in Europe. Roosevelt announced that the United States would be neutral, but not indifferent. In September 1940, when Britain was threatened by a German invasion, the United States gave the British 50 overage destroyers in return for naval bases in the western Atlantic. Two weeks later, Congress approved the first peacetime military conscription in American history. By early 1941, Britain could no longer afford to purchase American goods, so Roosevelt persuaded Congress to enact a "lend-lease" bill. Through this program the United States eventually supplied $13.5 thousand million in war supplies to Britain and another $9 thousand million to the Soviet Union.
In the Far East, Japanese forces had invaded Manchuria (1931), China (1937) and French Indochina (July 1941). Roosevelt responded to this aggression by banning American exports of scrap iron, steel and oil to Japan and by freezing Japanese credits in the United States.
On December 7, 1941, carrier-based Japanese bombers struck at Pearl Harbor naval base in Hawaii. The surprise attack sank or damaged eight battleships and destroyed almost 200 aircraft. The United States immediately declared war on Japan. Four days later, Japan's allies, Germany and Italy, declared war on the United States.
In 1941, Japan possessed a large navy and a greater number of aircraft than could be mobilized by the United States. Prospects for a Japanese military victory depended on Japan's
being able to defeat the Americans before the United States could retool its mighty industrial complex to produce military equipment. At this Japan failed, and the United States was soon producing huge numbers of ships, aircraft and weaponry.
Spurred by the fear that Germany might develop a nuclear weapon, the government spent $2 thousand million on the top-secret Manhattan Project, which produced and tested an atomic bomb in 1945.
American, British and Soviet war planners agreed to concentrate on defeating Germany first. British and American forces landed in North Africa in November 1942, then proceeded to Sicily and the Italian mainland in 1943, liberating Rome on June 4,1944, after months of bitter fighting. Two days later, June 6, "D-Day," Allied troops landed in Normandy in the largest amphibious operation in military history. Paris was liberated on August 24, and by September, American units were across the German border. In December 1944, however, the Germans launched a ferocious assault in the Ardennes region of Belgium. It took a week for the Allies to regroup and a month to counterattack and to force a German withdrawal in what became known as the "Battle of the Bulge." This proved to be the last German offensive of World War II. Finally, on April 25,1945, the western Allied forces met advancing Soviet troops at the town of Torgau, Germany. The Germans surrendered May 5, 1945.
In the Pacific, Japanese armed forces achieved a series of early victories. By May 1942, they had overrun the Philippines and forced the surrender of 11,500 Americans and Filipinos, who were treated brutally by their captors. In an atmosphere of war hysteria, 110,000 Japanese-Americans living in America's western states were forced into relocation camps. Government officials justified this action as a precaution against sabotage and espionage, but no Japanese- Americans were convicted of any act of disloyalty during the war, and many of them fought bravely in the armed forces.
By May 8,1942, the Japanese threat to Australia was checked at the Battle of the Coral Sea. In June, the main Japanese fleet, steaming toward Hawaii, was repulsed at the Battle of Midway, with the loss of four aircraft carriers.
Over the next three years, American forces advanced toward Japan by "island- hopping"—capturing some strategic islands in the Pacific and bypassing others. An Allied force under General Joseph W. Stillwell aided the Chinese, and troops under General Douglas MacArthur returned to the Philippines in October 1944. The central Pacific island of Iwo Jima fell to the Americans in March and Okinawa in June 1945. Â-29 bombers launched devastating raids against Japanese cities.
American forces now prepared to invade the Japanese home islands. In the hope of bringing the war to a swift end, President Harry Truman ordered the use of the atomic bomb against Hiroshima (August 6) and Nagasaki (August 9). Japan agreed to surrender on August 14. Nearly 200,000 civilians died in the nuclear attacks, but military experts agree that the casualties, Japanese and American, would have been far greater if the Allies had been forced to invade Japan.
After the war, tensions quickly developed between the United States and the Soviet Union. At the Yalta Conference of February 1945, Roosevelt, Churchill and Soviet leader Josef Stalin promised free elections for all the liberated nations of Europe. The western Allies restored democracy in Western Europe and Japan, but Soviet forces imposed Communist dictatorships in Eastern Europe.
In 1947, Secretary of State George C. Marshall proposed a massive aid program to help rebuild destroyed Europe. The U.S.S.R. and the Eastern European nations were invited to participate in the Marshall Plan, but the Soviets rejected the offer. Americans realized that an impoverished Europe in which deprivation and despair was widespread, would be susceptible to social and political movements hostile to western traditions of individual freedom and democratic government. The Marshall Plan was a generous and thoroughly successful program. Over four years it paid out $12.5 thousand million in aid and restored the economies of Western Europe.
In May 1947, the United States began sending military aid to the Greek government, which was fighting Communist guerillas, and to Turkey, which was being pressured by the Soviets for territorial concessions. At this time, Germany and Berlin were divided in two—a western zone under American, British and French occupation, and an eastern zone under Soviet domination. In the spring of 1948, the Soviets sealed off West Berlin in an attempt to starve the isolated city into submission. The western powers responded with a massive airlift of food and fuel until the Soviets lifted the blockade in May 1949. A month earlier the United States had allied with Canada, Britain, France, Belgium, the Netherlands, Italy, Luxembourg, Norway, Denmark, Iceland and Portugal to form the North Atlantic Treaty Organization (NATO).
On June 25,1950, armed with Soviet weapons and acting with Stalin's approval, North Korea's army invaded South Korea. President Truman immediately secured a commitment from the United Nations to defend South Korea, and American troops were sent into battle, later joined by contingents from Britain, Turkey, Australia, France and the Philippines. By September
1950, the North Koreans had conquered most of South Korea. The U.N. forces were confined to an area at Pusan at the southern tip of the Korean peninsula. Then General Douglas MacArthur launched a daring amphibious landing at Inchon in central Korea. The North Korean army was outflanked and shattered, and MacArthur's forces swept north toward the Yalu River— the boundary between North Korea and the People's Republic of China. In November, however, Chinese troops counterattacked and forced the U.N. army south of the 38th parallel (the boundary between North and South Korea). MacArthur advocated air and sea assaults against China, but President Truman believed that such a strategy would lead to a wider conflict, and on April 11,
1951, he relieved MacArthur of his command. Peace talks began three months later, but the fighting continued until June 1953, and the final settlement left Korea still divided.
Frustrated by the Korean stalemate and angered by the Communist takeovers in Eastern Europe and China, many Americans looked for "those responsible" and came to believe that their government too, might have been infiltrated by Communist conspirators. Republican Senator Joseph McCarthy assertec that the State Department and the army were riddled with Communists. McCarthy's sensational investigations uncovered no subversives, but his accusations and slanders destroyed the careers of some diplomats. In 1954, in the course of the broadcasts on national television, McCarthy was exposed as fraud, and he later was censured by the Senate Toleration of political dissent is one of the most fundamental and essential of American traditions. The McCarthy era—like the passage of the Alien and Sedition Acts of 1798 and the excesses of the Red Scare of 1919-1920—was a serious lapse from this tradition.