GREAT DEPRESSION

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."

Within 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.

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.

Date: 2015-01-02; view: 982