USA experienced a horrible economic meltdown that impacted on various aspects of economy such as farming and industrial sector; this was from from1929 to 1942[1]. The recession was triggered by various fiscal features such as the vast margin between the poor and the wealthy, government debts and surplus production of commodities only to mention a few.
Business failure, depreciated stock prices, high unemployment rates are some of the negative impacts created by the depression[2]. The depression exposed various societal and economic problems faced by USA that they hardly knew.
Since the depression was partially caused by the imbalanced allotment of resources, it revealed that the US economy suffered a colossal wealth imbalance. It indicated the huge margin that existed between the wealthy and the poor.
Additionally, it meant that a significant proportion of national wealth was controlled by few tycoons who never even felt the impact during the depression. The depression also revealed how the US administration, commerce and financial entities were incapable of coping with the economic meltdown. This was evident when businesses were unable to sustain the depression leading to closure.
Consequently, people lost their jobs leading to reduced purchasing power within the constraints of the economy[3]. In addition, many financial institutions such as banks reduced their operations due to a decrease in customer savings. This was indication that businesses had no mechanisms that would mitigate such a situation.
The depression also revealed an incapacitated government that was unable to handle an economic crisis before it worsens[4]. It never had effective immediate strategies such as stimulus packages that would curb the situation but instead it relied on market forces, an approach that was unrealistic.
The depression revealed a society with ineffective mechanisms that were incapable of handling an economic crunch. Instead of coming up with creative approaches of curbing the situation, the society (the poor) languished in poverty without any concrete efforts.
The depression also revealed how prosperous person never cared much about the poor since to them it was an opportunity to gain more wealth at the expense of the poor. Due to doubts of their investment security, Americans lacked confidence on their economy. It was so long before they regained assurance of their financial system, a setback that accelerated the crisis[5].
This clearly pointed out how people in US had lost faith with their economy. Racism was at its peak to an extent that it was applicable even for the fewer jobs available. This exposed how immoral the US society was at the expense of certain innocent races, especially at this crucial moment.
Sometimes one may not understand problems that a country faces until an event that reveals them comes to pass. American’s suffered because they didn’t have effective instruments capable of preventing or minimizing the dreadful period. If only recognized their societal and economic weaknesses in time they could have come up with different approaches to limit the situation.
Even though the economy of US was worst hit by the depression, some few individual emerged courageous and successfully regained back their economy, thank to President Franklin Roosevelt’s new ideas. This should act as an example to many states that have no mechanism to combat with recession. The lessons drawn from the recession are numerous and should serve as examples to different nations.
Bibliography
Constantinides, George. Harris, Milton. & Stulz, Rene’. Handbook of the economics of Finance (Amsterdam: Elsevier, 2003) 106-134
Cravens, Hamilton. Great Depression: people and perspectives. (California: ABC-CLIO, 2009) 143
Footnotes
Cravens, Hamilton. Great Depression: people and perspectives. (California: ABC-CLIO, 2009) 143
Cravens, Hamilton. Great Depression: people and perspectives. (California: ABC-CLIO, 2009) 143
Cravens, Hamilton. Great Depression: people and perspectives. (California: ABC-CLIO, 2009) 143
Cravens, Hamilton. Great Depression: people and perspectives. (California: ABC-CLIO, 2009) 143
Constantinides, George. Harris, Milton. & Stulz, Rene’. Handbook of the economics of Finance (Amsterdam: Elsevier, 2003) 106-134
In the period between the end of First World War and the onset of the great depression, United States enjoyed relatively stable economic conditions under the leadership of a string of republican presidents.
The market was flooding with new and improved products, business men engaged in extensive marketing and financial institutions provided potential consumers with easy credit to boost their purchasing power. In fact, in August 1928, Hebert Hoover, a republican presidential candidate at the time confidently proclaimed that America was nearer to the final triumph over poverty than ever before (Wiegand, 2009).
Economists, historians, and financial analysts have over the years tried to reach a consensus over the actual events that led to the great depression. In the 1920s persons employed in the service industry such as office secretaries comprised 30% of all the people who were gainfully employed and this percentage had risen to 38% by 1929 (Wiegand, 2009).
However, the economy of America lacked diversification and employment opportunities was heavily dependent on a few industrial sectors which were operating in the economy. Upon the declination of these industries in the late 1920s, expenditure in the construction industry reduced by approximately18 % in the period between 1926 and 1929 while automobile sales continued to decline (Wiegand, 2009).
Consequently, the need to lay off workers who were not directly involved in production process such as service industry workers emerged which led to widespread unemployment and poor standards of living among these workers.
In addition to lack of diversification in American economy, there was unequal distribution of wealth in the country’s economy which resulted in reduced purchasing power among consumers (Brinkley, 2007). In the period before the great depression, industrial and agricultural production had increased significantly.
However, low income levels among most American consumers reduced overall demand and resulted in disequilibrium between demand and supply which negatively impacted on industrial performance. The credit structure in pre depression period contributed to occurrence of the great depression. Financial institutions incurred great losses emanating from customers defaulting on loans and reckless investment in the stock market.
In the late 1920s, Europe, a major importer of American goods reduced its demand for American products. This was attributed to increased productivity among some European countries and the fact that some countries within the region were experiencing financial difficulties (Brinkley, 2007).
In addition, the international debt structure in American economy was highly unstable due to the post World War effects. Some European countries with shattered economies such as Germany and Austria owed huge amounts of money to American banks and were unable to repay. In response to this, American banks made huge loans from European countries’ governments to service their own loans which led to piling up of debt.
Economic and Psychological Impact Summary
The great depression brought with it a great deal of hardship and suffering which extended in every aspect of American life. Its consequences were devastating to the country’s economy and to people’s lives. For an office secretary, the major threats posed by the great depression were loss of employment and reduction in disposable income.
Unemployment caused adverse psychological effects to American workforce whom had developed in a culture where unemployment and poverty were viewed as signs of failure rather than transition in life. A jobless office secretary would develop a sense of idleness, helplessness and reduce his/her self esteem which resulted in frustrations and loss of self worth among the unemployed Americans.
The great depression adversely affected the financial ability of American workers such as office secretaries. Due to loss of employment and reduction in per capita income, consumption ability of office assistants considerably reduced leading to reduced purchasing power hence poor standards of living.
Due to persistent unemployment and decline in income, poverty incidences among these workers increased rapidly. Increased strain for such families to meet their basic needs and the prevalent uncertainties in the economy resulted in the market retreat from consumerism which reduced overall demand.
The great depression presented new challenges for workers who were already facing the risk of unemployment. Bank loan officers incurred enormous losses due to payment default by low income borrowers while manufacturing executives had to deal with reduction in financial resources available for spending. In addition, automotive dealers experienced reduced sales while farmers lacked adequate market for their products due to reduction in overall demand.
President Roosevelt’s new Deal Summary
Franklin Roosevelt’s new deal played a major role in reconstruction and recovery of American economy from the great depression. The republican president established the federal emergency relief administration which provided financial grants to relief agencies which provided assistance to desperate and unemployed Americans (Brinkley, 2007).
The unemployed office assistants consequently benefited from such relief programs which provided them with basic needs and financial assistance. In addition, Roosevelt’s government established temporary projects through the civil work administration where workers would gain temporary employment to further sustain themselves. Office assistants secured employment in these industries which provided them with an opportunity to earn income.
In a bid to establish a long term solution to the problem of unemployment in the United State’s economy, President Roosevelt sought to promote industrial recovery in the region through a series of reforms. His administration allowed the creation of labor unions which advocated for protection of worker’s rights, reasonable salaries, and creation of jobs in America.
In addition, the congress passed the national industrial recovery act in 1933 which further promoted efforts towards stabilizing the labor market through improved industrial performance (Brinkley, 2007). An office secretary would therefore benefit from working in a relatively stable economic environment where jobs were secure and the income levels were reasonable.
President Roosevelt’s new deal aimed at responding to the economic depression which had sent a series of panics to the banking sector and threatened the entire financial system and the living standards of Americans. Coupled with the president’s pleasant personality, the new deal served to promote confidence among the Americans amidst economic and social turmoil that persisted in the society at the time.
The new deal spearheaded recovery efforts in United States through its imaginative and far reaching projects instigated by the federal government and the Alphabet Laws. These projects promoted industrial growth, financial stability, stock market recovery, social and political reconstruction, and overall economic development.
However, the new deal faced a lot of criticisms from President Roosevelt’s opponents such as the American liberty league which raised a lot of concerns over the new deal’s dictatorial policies and its supposed attacks on capitalism consequently raising substantial public opposition (Brinkley, 2007). In addition, the new deal appeared to focus more on the role of federal government in American life rather than providing immediate solution to the great depression.
Reference List
Brinkley, A. (2007). American history: a survey. New York: McGraw Publishing.
Wiegand, S. (2009). Lessons from the Great Depression for Dummies. Indiana: Wiley Publishing Inc.
The Great Depression (GD) of 1929-40s refers to the collapse of the world economy. It was normally caused by the collapse of the stock market. During this epoch high levels of unemployment dominated the world thus the closure of a myriad of businesses (Rauchway 105) .
Although it had no significant impact in some countries around the globe, cases of countries such as the US was severe (Hillstrom 11). This left a large proportion of individuals jobless. In addition, the majority of them lost high valued properties and became homeless. It was therefore, necessary that, the government to compensate the affected individuals.
The government accomplished this by devising a strategy aimed at averting the situation. A number of prominent members in the government devised numerous new deals. This was the turning point as the Americans became awake and sought for the strategies of ending the depression (Edsforth 262).
A number of interested individuals brought their opinions. For instance, a democrat entitled as Glass believed in the dominance of the white, budget devoid of deficits, the statutory rights, as well as the controlled power accorded to the president. Therefore, this document will discuss the cause, effects, as well as the reactions to the great depression.
The Cause of the great depression
Before the economy collapsed, Americans experienced some problems, which later became the cause of the great the GD (Murphy 17). For instance, there was poor distribution of wealth resulting to the increased gap between the affluent and the poor. The poor banking system among the banks was an additional challenge. This is because banks were in favor of some sectors.
Unfavorable balance of payments deficits dominated the entire economy, resulting to more imports than exports hence the US turned into a creditor nation. There was also the general increase of the price of commodities in the stock exchange market. This culminated into a vast wealth accumulation among the capital class (Murphy 112). There also existed some ignorance of the less speculative economic indicators leading to high investments among the capitalists (Hillstromn 109).
The gambling of commodities created a high inflation and this weakened the economy expansively. Financial institutions such as banks started numerous loan facilities in favor of stock- buyers. This was because stocks were selling at a good price than the other commodities in the market. In addition, the banks allowed capitalists to use stock as security for loans. In case the value of stock goes down, the financial institutions have less value security of loans taken by capitalists.
This would therefore, mean that financial institutions remain with less monetary items. This is indicative that productive businesses would not thrive, and mortgages would foreclose. As a result, bankruptcy among the business people heightened due to the collapse of the stock exchange used by a large proportion of individuals as short cut to becoming wealthy.
There was an immense panic among people since they had lost confidence in their savings. The panic resulted from the investment of client’s savings on the stocks. The closure of the stock exchange market meant that banks experienced a high level of withdrawals thus their closure. A great market crash was therefore, experienced in late October 1920.
Effects of the great depression
The collapse of the stock market had a profound impact on the industries. For instance, numerous industries lost their capital in the market crash. Moreover, some industries lost their capital due to bank’s closures. Consequently, capitalists had to reduce the working duration sometimes, as well as the worker’s wage bill. This resulted to low purchasing among the customers, as well as a reduced spending on luxurious commodities.
Conversely, the reduced spending among the customers meant low demand of workforce. This further led to a reduction of the number of workers, and their wage bill. Drastically after the cost reduction measures, a myriad of businesses could not thrive leading their eventual closure. Lastly, the workers lost their jobs. Consequently, the unemployment rate escalated the ratio of dependency.
Reactions to the great depression
After the collapse of the economy, Americans sought a solution for the economic crash. Some Americans blamed President Hoover while others targeted the financial institutions and businesspersons. The collapse of the economy was not only attributed to one side, but to all structures of the American’s economy (Marsh 25).
The government responded in several ways. First, President Herbert, the President of the time in the US refused to intervene on the people’s behalf. He regarded the government intervention as a moral decay of the American person. He further argued that, during such a difficult situation in a country, proper strategic measures are crucial in curbing the situation.
Though forced by the congress to show his concern on the crash, he remained reluctant. This was due to his concern of balancing the national budget. More importantly, he was against violating his principles. He conducted spending in order to stabilize the business sector.
He was encouraged by the fact that regained prosperity calm the poor majority, who in turn they behaved unwillingly in waiting. Consequently, due to his uncaring nature, he was later defeated in a preceding elections of 1932 by Franklin D. Roosevelt. During the campaigns, Franklin had promised to respond appropriately in order to mitigate the depression.
While in office, he carefully followed his advisors instructions and developed programmes aimed at recovering the economy. He later launched the politics of the New Deal, which was a measure of essential conservation. The New Deal was to redeem capitalism and the key economic institutions of US from the dangerous depression.
The New Deal (ND)
In the first deal, the Tennessee valley Authority (TVA) of 1933 reflected on the incoming liberal means of the second ND. The TVA provided the required funds to transform the economies of seven depressed states a together with the Tennessee River. This entailed the construction of dams, power making, as well as the flood and soil erosion control.
The above construction activities were relatively high wage jobs (Edsfoth 264). Sources have shown that this is a socialism ideology. Other sources have regarded them as a proper way of solving social and economic problems. The second ND (1935-40S), aimed at ending the depression by spending in all economic activities. This increased the number of consumers, hence a higher demand for commodities. The resultant effect is a high spending hence economic growth.
Conclusion
Since economic depression, results from preventable factors, there, therefore, need to find appropriate prevention measures. First low spending by both consumers and the government demands improvement. The government, therefore, should use its huge financial power; inform of taxation and spending, as a precautionary measure to stabilize the economy. The increased spending needs emphasis in order to deal with depression adequately. This is crucial in the prevention of cases allied with the economic crash.
Work Cited
Edsforth, Ronald. The New deal: America’s response to the great depression .Malden, MA: Wiley-Blackwell, 2000. Print.
Marsh, Carole. The great depression and the new deal. Peachtree, GA: Gallopade International. Peachtree, 2005. Print.
Murphy, Robert. The politically incorrect guide to the great depression and the new deal. New York, NY: Regnery publishing, 2009. Print.
Rauchway, Eric. The great depression: A very short introduction. New York, NY: Oxford University press, 2008. Print.
Period of Great depression remains a memorable economic period in the US history. During this period millions of people lost their jobs, and the United States experienced the worst economic hardship ever (Conlin, 777). The effects of the depression had a significant impact all over the world, including Germany where it resulted into World War II. It was not only caused by a single factor, but by a combination of factors including both, domestic and worldwide conditions.
One of the reasons which caused this Depression was overproduction of the agricultural sector. Workers had to be laid off until the manufactured surplus was used up (Document M). It hampered considerably with the business cycle when people had enough of what they needed.
As a result, the agricultural farm products’ prices dropped (Document N). Some could not afford to pay the government taxes and had no choice but to sell their farms in order to pay these taxes. Those who had debts had their land auctioned to repay the loans. As a consequence, farm products reduced in quantity and many farmers lost their land leading to reduction in industrial production.
Another reason which led to depression was the decline in spending or the aggregate demand. This was due to unemployment, loss of jobs and present harsh economic time. Reduction in demand affected the supply and many industries shut down and some laid off their workers in order cut down production. The economy of the United States had worsened to an extent where those who had jobs got enough to keep them alive. They lived on forty cents a day, and had little money to use in making purchases (Document I).
Stock market crash also fuelled the Great Depression of the United States. Many people had invested in the stock market by 1920’s as heavily as never before. Trading on stocks was the most lucrative investment during this decade, and many of those who had invested in stocks flourished. The deviation from the long term trend was above twenty percent after 1920 (Document A). There was a heavy investment in stock during this period leading to extremely marginal stock.
However, the down fall of this came in 1929, when a few stock market investors started selling their stocks. This was due to a prediction of the end of rise in the stock market thus; there was a nationwide stampede to unload the stocks (Document D). A sudden decrease in stock prices was then realized since there were no buyers and a large number of desperate sellers. The result was a loss in millions of dollars. It led to the Great Depression in the United States.
The American foreign policy also played a role in the Great Depression. It was an attempt by the Americans to export more than it could import (Document P). The policies favored monopoly and rise in inequality in terms of wealth and income. However, it charged a higher tax for the imports, thus reducing trade with other countries.
This happened after the government’s creation of the Smooth Hawley Tariff of 1930 which raised the average duty on European imports from forty percent to sixty percent (Document P). Although this was created in favor of America, it had a significant contribution to the extreme decline of world prices of raw materials. It affected international linkages of the US to other countries, and in revenge other countries came up with their own policies as a correction to trade imbalances.
Banking panics were felt towards the end of 1929, and at the start of 1930’s. Most of the banks had inherent weak financial structure. People started losing confidence with the banks, and as a result there was a simultaneous demand by those people who had deposits in the bank (Document L).
Most of the banks ran into insolvency during the period with the weakness of one bank spreading to the rest (Document L). More debts reduced chances of getting more loans. Most of the banks had run into bankruptcy. It affected the stocks, and most of the industries which depended on banks were shut down. Their workers were left jobless, and they had to be laid off. This led to hard economic times in the USA which had never been felt before.
Lastly, the period of 1920’s was a period of economic boom. Many people enjoyed the privilege by buying goods on credit and installments, since most of them were employed. Debt was taken as a normal thing which could be repaid after some time. Three out of every four radios were purchased on the installment plan, as well as sixty percent of all automobiles and furniture (Document H). They didn’t take the future into consideration.
The unemployment percentage rate had risen from 4.7 percent in the year 1926 to 23.1 percent in the year 1930 (Document F). With most of the people losing their jobs, they were not able to pay the monthly installments. They remained with their large debts, and with most of them, goods were repossessed.
In conclusion, these factors combined led to The Great Depression that had a great and very negative impact on the US economy, as well as on the economy of other countries worldwide. After this period, many countries reacted by developing crucial macroeconomic policies that fuelled economic downturns and upturns. Up to date central banks all over the world try to moderate recessions from time to time.
Works Cited
Conlin, Joseph R. The American Past: A Survey of American History. Boston: Cengage Learning, 2011.
The Great Depression was a time in history that had a noticeable and largely significant influence on the world. The hardships that people went through have become instilled in time, teaching future generations of the changes that can affect many people. John Garraty looks into the reasons and times that ruled the society during the hardships and limitations that will never be forgotten.
Very specific words are said by Garraty when he identifies the period in history as “a cataclysmic event and it produced such extraordinary changes in the political, economic, and social structure of the United States…” (Garraty 167). The 1900’s were a time when the world was changing, torn by war and many things would define the future at a speed previously unseen. His book looks at the factors that have caused and prolonged the issues that have deprived many people of jobs and ability to come out of the atrocious conditions.
John Garraty also examines how agriculture was impacted, as people were very much dependant on it. The industry was at an all time low which caused a chain reaction of people losing jobs and not being able to support themselves or their families. As the Great Depression happened in other countries as well, it was an international phenomenon that has had a profound effect on several strong and major nations.
John Garraty mentions that a lot of people thought the Great Depression happened because of the” Wall Street crash of October 1929” (Garraty 169). It is possible to suppose that one event would start the process but even though it could have been the catalyst, it was not enough to have such an effect all by itself. There were many factors that led to the global fall of economy. The government was taking close look at the budgeting problems and several policies were being analyzed.
Hoover is mentioned several times as a center figure in the balancing and searching for the right strategy. As the breakdown was commonplace, the volume of production was decreased and the bankruptcy of many firms became inevitable. The radical changes had to be made and Roosevelt became the key person who influenced the nation and directed it in the right way (Garraty 176). He has given people better access to jobs and a chance to rebuild the world.
Even though John Garraty takes a detailed look at some important points, the evidence is somewhat unclear to the layperson. The reasons and causes for the Great Depression must be deeply analyzed, so that such future situations can be avoided. The book also gives a lot of examples that come from other historical texts and little explanation is given as to the reasoning and thinking of the writer.
A person reading the book must be very knowledgeable of the events and the moment in history when the Great Depression took place. Someone who is unaware will miss the points that require attention and the focus will be lost. Another improvement could be related to the taking apart of solutions and outcomes that were developed by the government and how people have influenced the world domestically and internationally.
Overall, the book is educational and has ideas that are very useful in understanding and learning about the past, as well as the difficulties people had to go through. Although, it would not be enough to paint the whole enormous picture, so other sources must be consulted.
Works Cited
Garraty, John. The Great Depression. Harpswell, United States: Anchor Publishing, 1987. Print.
The Great Depression: A Diary is James Ledbetter’s and Daniel Roth’s edited version of Benjamin Roth’s personal diary that he wrote during the financial crisis of the 1930s. Being a lawyer with a wife and three kids, Roth experienced the major financial crisis of his life. Until today, historians have not wrapped their mind on matters that relate to the depression of 1930-1940, and why the crisis took that long.
As a lawyer, Roth documented the confessions from his clients and that of his friends to his journal for 10 years. According to these confessions, it is evident that everyone in all lines of businesses was struggling to earn a living (Ledbetter and Daniel 88). With the prices of everything going down, bank savings getting frozen, tenants being unable to pay rent, and just everyone struggling to survive, it is obvious that the economists of the 1930s had messed up some things along the way.
Having taken so long to retain the economic status of Ohio, it was Roth’s conclusion that neither the government nor the economists were any good. He had stopped believing in anything the government said; all he heard were depressing concerns from his clients, friends, and people around him. All businesses were getting worse; people had given up on the government in reviving the economic condition, and some people lost everything in their quest to look for safer forms of investment.
Given that his job depended on the financial stability of others, Roth was caught up in a crisis that would only be solved by venturing into other investments. Just like many people, he had ideas on how to invest safely, but had no money to do so. Though there are various theories mentioned that explains the cause of the crisis, Roth clearly insists on concerns about the war that was approaching as the major interruption that affected the intervention of the government in reviving the economy, and the stock market (Ledbetter and Daniel 201).
The book is an episode that entails the events that uncovered during the most fascinating era of the American history. For this, the book fails to entertain the readers as all the happenings documented are depressing. However, this was not the intention of Benjamin Roth as he only wrote this in his journal as a reminder of how hard times were, but it was his son Daniel who took it upon himself to published the diary as a book.
The book covers very little on the normal lifestyle of the people in Youngstown before the crisis; all that it documents are the hardships that describe Ohio as a hopeless place to live. With the current form of leadership, there are great lessons to be learnt from these events that took place decades ago. Having struggled for years to bring prosperity back, Roth understands how government policies and politics affect the future.
Having lived through this crisis, the book offers sincere and factual causes of the great depression, the hardships, and prices people had to pay to survive. The book is recommended for everyone as it documents events that took place in the 1930s that might be handy in getting ready for such crisis. It is an eye opener to those that are facing the current financial crisis as it holds a historic value that helps in avoiding the repetition of the mistakes that were made decades ago.
Works Cited
Ledbetter, James, and Daniel Roth. The Great Depression: A Diary. 1st ed. 2009. New York: Perseus Books Group. Print.
The book revolves around the problems that Americans faced and how they rose above all the tribulations. The Great Depression originated from a crash of the stock market from October 29th 1929 which is referred to as “Black Tuesday”.
The devastating effects were felt through the international markets with international trade being affected by more than 50%. One of the effects in the US was the unemployment rate rising to 25%. It lasted up until the end of World War 2.
The book primarily circles around three principles: people, poverty and politics. People highlights the plight people faced with the downfall of the stock market which took the economy and turned it on its head. The economic downfall led to jobs being cut and many businesses failing. It led to the formation of groupings in society due to their similarities in their plight to restore dignity and compassion to their lives.
Poverty highlighted the corruption that accompanied the economic downturn. It retarded the economic gains that had taken place during the normal economic times. The widespread poverty had reared its ugly head in almost every corner of the economy leading to massive losses and countless lives left in despair.
Politics highlights the revolutionary ideas that were used to rehabilitate the declining economy by Roosevelt and his administration. The use of practical ideas and also the use of authors and journalists set precedence unmatched in concept development and creation.
Bruce McClure and Lorena Hickok were to write about their discovery during their travels, and what they discovered were grass roots portraits of depression-wrecked America. They were able to engage with civil leaders, preachers, businessmen and teachers in constructive dialog, which helped them to unearth the following results.
he declining flop houses were overflowing with tenants, corruption and infected with incompetence in the aid offices. Another problem was a lifelong class of the illiterate, mentally ill and the elderly. These findings led to Roosevelt’s administration implementing the new deal.
Another set of findings released by Bauman and Coode included “the racial and class prejudice”. They were able to embrace the beliefs of the ‘deserving’ and the ‘undeserving poor’ leading to new deals such as the 1935 Social Security Law. Though at first they might seem biased and insensitive to people’s backgrounds, but it also highlighted their plight and how they got there.
In addition, Martha Gellhorn also shows sympathy with her findings where she shows her disgust of what she terms as ‘white trash’ families in South Carolina. This suggested a 2-prolonged aid program of education and eugenics to ensure they do not end up being in distress while also safeguarding their children’s future.
Her reports were used by the federal government and enabled them in investigating issues that were not normally open to women (Bauman, 52). She also worked as a photographer during the Great Depression.
The book in its entirety objectively shows how a trying and difficult time in American History was saved by a combination of innovative leadership combined with pioneering resilience used to achieve economic prosperity. It also shows as able to promote innovative ways for problem solving by engaging different stakeholders from different lifestyles to share a common goal. This book is must read for any individual with leadership aspirations.
Works Cited
Bauman, John, and Thomas Coode. In the Eye of the Great Depression: New Deal Reporters and the Agony of the American People. 1st ed. Northern Illinois University Press, 1989. Print.
As observed by Romer (2003), “the great depression took place in the late 1920s to the late 1930s and was the longest and most severe depression ever experienced in the industrialized Western world” (p 1). The world wide economic downturn that originated from the United States was characterized by massive decline in output, widespread unemployment, and acute deflation in most economies across the globe (Romer, 2003).
However, the timing and magnitude significantly varied in various regions across the world with some parts of the world such as United States being adversely affected while other regions were mildly hit. In the United States, the great depression set off in 1929 and continued until early 1933 where it was set on a road to recovery but these efforts unfortunately failed and the American economy was highly characterized by drastic falls in prices and real output (Romer, 2003).
In addition, the industrial production of the country’s economy fell by 47% while the real gross domestic product fell by 30% and the whole sale price declined by 33% resulting into deflation; further, the unemployment rate is believed to have exceeded 20% which negatively impacted on the purchasing power of the individuals consequently reducing aggregate demand (Romer, 2003).
Poverty and despair were the main features of the great depression in American region with most people being unable to access the basic needs of food, decent clothing and shelter and relying on aid from charity organizations (Burgan, 2001).
The depression was the worst to ever hit the nation and when president Franklin D. Roosevelt brought new policies and ideas to Washington, there was a link of optimism in the region but this was short lived since the depression worsened in 1938 and did not end until the country went into world war ll in 1941 (Burgan, 2001).
Factors That Led To the Great Depression
The prevailing government policies at the time highly facilitated the occurrence of depression and the failure and derailment in recovery of major economies. From 1929-1933, the American economy experienced substantial reduction in money supply from the federal reserves (Edwards, 2005).
This, coupled with subsequent bank failures served to intensify monetary contraction in the economy and destabilize the economy which precipitated the occurrence of depression (Edwards, 2005). Scholars believe that substantial decline in money supply which was attributed to Federal Reserve decisions had severe contractionary effects on overall output in the economy as well aggregate demand (Romer, 2003).
This may have significantly influenced people’s decisions to spend as there was widespread fear and uncertainties with consumers and business owners anticipating decreases in wages and prices in the future (Romer, 2003). To further worsen the situation, most states prohibited banks from diversifying their portfolios across jurisdictions which significantly promoted bank failures while in countries like Canada which allowed nationwide bank branching, incidences of bank failures during the period were not experienced (Edwards, 2005).
Bank failures led to widespread bank panics across the American economy whereby depositors lost confidence in the solvency of banks consequently withdrawing their deposits from banks (Romer, 2003). Increased withdrawals by depositors forced banks to liquidate loans in order to raise the required money which served to increase bank failure in United States (Romer, 2003).
The early 1920s was characterized by tax reductions which facilitated economic boom in the American economy during the period (Edwards, 2005). However, President Hoover signed a revenue act in 1932 which created a provision for significant tax increment in the region increasing the tax rate from 25% to 63% while President Roosevelt further increased individual and corporate taxes with the highest individual rate increasing to 79% (Edwards, 2005).
The tax increment killed the laborers’ incentives for work as well as investment and entrepreneurship consequently reducing the amount of spending which intensified the effects of depression and frustrated the efforts of recovery (Edwards, 2005). In addition, the Smoot-Hawley trade act which had been established to boost farm incomes by reducing foreign competition in agricultural production in America may have played a significant role in reducing world trade during the period of depression (Edwards, 2005).
The trade act had raised import tariffs to an average of 59% on more than twenty five thousand products which prompted other countries to retaliate by imposing increased restrictions on United States’ products consequently reducing trade such that by 1933 the overall international trade had reduced by two thirds of the level prevalent before the recession (Edwards, 2005).
However, some scholars believe that this policy had minimal significance in the occurrence of the depression but may have contributed to extreme decline in world price of raw materials which resulted in severe balance of payment problems for primary products exporting countries (Romer 2003).
Another damaging trend that may have facilitated the occurrence of the depression was the prevalent inequality in wealth distribution whereby in 1929, the richest 24000 families in the US owned 34% of all the monetary savings in the country while an approximate 21 million families lacked any savings (Burgan, 2001).
Consequently, only few Americans could afford to locally produce goods despite the fact that factories kept on producing goods which led to under consumption which further led to the weakening of the economy (Burgan, 2001).
Conclusion
The great depression caused devastating effects to major economies of the world and adversely affected international trade. Numerous measures implemented by the government proved fruitless in containing the situation and the contemporary economies should learn from this occurrence in order to avoid incidences of depression in the current dynamic economy.
Reference List
Burgan, M. (2001). The Great Depression. Minneapolis: Compass Point Books.
Many historians reckon the twentieth century to be a period of civilization. The world underwent major social, economic, and political changes shaping its current state. In America, there were numerous changes taking place. This was the period when America was actively engaged in war and social alterations. Form the war in Japan to the Vietnamese war, and many other political modifications, these changes destined to cross over into the 1970s and 1980s.
For example, civil movements increased in the 1970s. Here, women sought to be heard, and their views channeled into development. On the other hand, Americans became more disillusioned towards their government, and environmental conservation techniques became a talk of the day. Technologically, America made a big stride over space explorations and more advances in computer hardware and its applications.
Nevertheless, these political and social changes of the 1960s flourished in 1970s and marked a new era of political and social change. American culture continued to flourish despite social realignments, impeachment debates, and international wars. Notably, these social and political changes inspired art sceneries like music, fashion, entertainment, and literature development.
For example, America was involved in the Vietnamese war during the 1960s. However, it is not clear on the reasons why America decided to participate in the war. Many Americans were opposed to the war leading to early withdrawal from the war in 1973. This war had serious negative impacts especially to the economy of America. The government spent taxpayers’ money in sending troops to Vietnam while on the other hand, the social standards kept declining.
For instance, young people faced a dilemma when the government enacted a policy demanding anybody above 18 to go for war, or attend college and later, go for war. Consequently, student demonstrations became rampant and some crossed over to Canada to evade going to war. (Gillis, 2009, Para. 1-3).
Indeed, America experienced the greatest depression between 1940 and 1970. Although this lessened during World War II, the policies did not counter the ever-changing social and economic trends. Unfortunately, in 1973, the oil crisis paralyzed major economic changes in America. Later, manufacturing companies faced production dilemma due to oil threat. The period continued up to 1979 when America entered presidential elections.
Additionally, in the early seventies, America experienced an increasing population growth reading to social and economic stagnation- a period popularly known as ‘stagflation’. Additionally, household structures changed significantly and with women movements, women became head of families by choosing to live single. Interestingly, in the 1970s, social and economic changes went hand in hand with age, race, and sex of individual Americans.
Depending on the household-head, families line up according to the amount of revenue the breadwinners receive. Thus, demographic changes to a large extent, contributed poverty in children and women, of course with strong marginalization. (From, 2000, pp. 290-295).
After the war, the turbulent economic hindrances seemed to cascade away, and soon, America was back on economic growth. But this was not until the 1980s. The government had now embarked on economic dispensation following the election of a new president. Nonetheless, a watershed in 1973 and 1983 characterized by recession, inflation, and economic stagnation hampered the efforts of the government.
Economic normalcy did assume its normal growth when Americans decided to increase productivity and manufacturing-now that the oil crisis had gone, and market competition of goods and services. Depending on an individual’s race, sex or social demographics, poverty levels seemed to vary.
For example, nonwhites in America lived in poverty because; it was not easy for them to engage in income-generating opportunities due to disparities along ethnic and racial lines. On the other hand, families headed by females continued to increase. Conversely, according to household research, these families languished in poverty as only one provider supported the family. In families where the husband and wife worked, there was a decline in poverty levels due to shared responsibilities.
Contrary to the postwar period where marginalized groups like children and the old enjoyed economic success, in the 1970s and 1980s, these groups were the most affected. This is because; the government reconsidered social security benefits by making them stagnant. Of course with inflation and globalization, there was depletion of value leading to poverty among retirees. Consequently, children felt the hinge as most parents could not afford to buy the basic needs.
In essence, even up to today, the social and economic changes of a family depend on the working status of parents, either employed or doing business. Moreover, white families enjoyed excess revenue because; employed white Americans earned double the amount earned by black Americans.
Accordingly, this is a clear physical economic indication of a black family whose income stood at 62 percent of the white family’s income. All the same, this racial gap continued to dominate in America in the 1970s and 1980s and perhaps, even today. (De Ferranti, 2004, pp. 8-32).
In the 1970s and 1980s, America experienced changes in setting up social families where; female-headed households increased steadily among black Americans than to nonwhite and white Americans. Nevertheless, there were reasons that led to the formation of these social families. For example, single mothers with children opted through own will, to have individual households instead of getting married.
On the other hand, divorce, children out-of-marriage, and remarriages contributed to the establishment of female-headed families instead of households. Noticeably, the two decades marked serious changes in the marital behavior of Americans. For instance, many white American women decided not to remarry and on the other hand, black Americans feared marriages to avoid household responsibilities in the case of unemployment. In households, women relied on their spouses for economic support.
In the 1980s, the economic status of many Americans changed. This is because; American economy had grown and productivity increased. The oil crisis of the 1970s had passed away paving way for production and employment opportunities. The average economy of working Americans rose up steadily and many found themselves in a better state. On the other hand, persons over 65 years old were well-off economically with minimal chances of being affected by poverty.
Although these people did not work or engage themselves in productive work, their large income decline gave them an opportunity to experience an increase in revenue from other sources. On the other hand, women aged 65 and above experienced large economic decline and after that, suppressed income. Fascinatingly, the two decades saw a period of great transformation in retirement age and social benefits.
The probability of the old attending their workplaces declined heavily as many chose to retire at the age of between 55 and 59 instead of extending for five or ten more years. This is because; many Americans became attracted by the social security benefits realized after retirement. Other factors, which prompted early retirement, include deteriorating health conditions, income savings done so far, pensions, and dividends. (Evanson, 1988, pp. 1-10).
In conclusion, the socioeconomic changes in the 1970s and 1980s seemed similar. In the 1970s, Americans started experiencing a change in their economic status towards the negative side. This is because; previously, depression had taken center stage in controlling people’s economic status, and of course, the oil crisis in the 1970s suppressed production.
However, in the 1980s, when the oil crisis ceased, productivity increased hence, yielding more income to industrious Americans. Along demographic lines, poverty levels among children declined, although working Americans and old Americans enjoyed economic success. Overall, individual Americans found themselves much better economically, especially in the 1980s than in 1970s due to policy changes.
Reference List
De Ferranti, D. (2004). Inequality in America: breaking with history? Washington D.C. The World Bank.
Evanson, E. (1988). Social and economic change since the Great Depression: Studies of census data, 1940-1980. University of Wisconsin-Madison, Institute for Research on Poverty, 11(3), 1-10.
Frum, D. (2000). How We Got Here: The ’70s. New York, New York: Basic Books.
Gillis, C. (2009). American Cultural History: 1970-1979. Web.
The great Depression commenced with the crash of Wall Street in October in 1929 and started to spread rapidly globally. The unexpected market crash indicated the start of a decade of deflation, high levels of unemployment, low turnovers, poverty, declined personal growth as well as economic progression.
Although the main causes of the great depression are still vague and contentious to date, the overall outcome was unexpected and resulted in the universal loss of trust in the economic future. This paper seeks to affirm the thesis statement that gardens can be utilized in difficult economic situations in order to bring hope and salvation to the population that has been affected.
Great Depression
One of the industries that were hardly hit by the aftermath of the market crash was the agricultural sector. The entire population depended on it for survival in this major sector. Lack of employment, reduced income, as well as poverty, which led to hunger, prompted the government to come up with strategies that would combat the worsening economic conditions.
The great depression, which severely affected the world’s economies, lasted until 1932. It forced thousands of people out of their income generating sources and cast them into serious financial difficulties.
It was after realizing the aftermath of the depression that governments introduced relief gardening programs to combat emotional stress, poverty, and hunger (Williamson 20). They were meant to serve as emergency measures to solace the population, as the government was working on other stringent measures to solve the depression crisis and stabilize the economy.
The relief gardens also referred to as vacant lot gardens, subsistence gardens, or welfare garden plots. They served the same purpose as the 1980’s potato patches. These gardens created an atmosphere of productivity, usefulness, and significance. Moreover, they offered work opportunities, food and improved the spirit and health of the entire population involved in the gardening (Tucker 13).
Role of Gardens in Great Depression
From time immemorial, gardens have been utilized to provide families with substantial amounts of food throughout the year. Gardens can supply the family with food for meals and can produce products that can be sold at a profit to purchase some essential things required by the family. A family requires enough staple food however; there must be enough of other kinds of right foods. A garden with a variety of different foods gives the family a wide range of nutrients that are necessary for the development of the body.
Gardens in great depression provided people with a means of survival. Due to lack of income generating activities none related to agriculture, families used to rely on the income generated by the produce from the relief gardens. Apart from producing vegetables for consumption, the gardens offered a source of income.
Lack of employment can lead to a hopeless living, deterioration of a nation’s economy leads to an increase in product prices causing people to struggle financially. Relief gardens in the great depression offered people a chance to meet their daily financial needs. By reducing the amount of money spent in supermarkets and raising extra income through the sale of products from the gardens, people were able to manage through the great depression. Relief gardens offered to people a new horizon of hope.
Relief gardens introduced the culture of farming because even after the great depression was over, people continued with farming practices. The economy that followed the great depression was much stable as compared to the former one. Both the agricultural and non-agricultural sectors were fairing very well. People were no longer worried about the adverse economic situation since they had in mind another alternative to lean on when things were not working.
People’s Hope was restored and there were no cases of rampant unemployed, those with unstable sources of income always relied on their farms to survive. No longer did people view farming as an activity for the poor, the whole nation embraced farming, and the government encouraged its people to engage more on farming activities. The government offered farming incentives and provided subsides on farm supplies such as fertilizers and pesticides.
Preservation of food was done through smoking, salting, and drying. Through technological advancement, people have been able to invent effective methods of food preservation. These methods include food dehydration, canning, and refrigeration. Through historical gardening, we can learn the historical setting of civilization (Emerson12). There were no machines for farming, and people had to do it manually. Today, people use advanced machinery to do all kinds of farming.
Gardens can also have political and economical aspects as they did during the Great Depression. It was the idea of the reigning government to introduce relief garden program to help resuscitate the economy. Gardens acted as a source of income to individuals and gave them hope for the future. People depended on produce from the farms to feed their families and provide them with financial supplement.
According to Kleindienst, the gardening act is perceived to have a spiritual inclination. She explains how the land could talk, and the gardeners could take time to learn from the wisdom that was passed down on them orally from generations (Klindienst 25). Earlier people had a close attachment to gardens since they perceived them as sources of life.
Gardens were viewed as a source of life since without gardens, it was hard to survive during the great depression. People depended entirely on the fruits gotten from the gardens; there was no other option but to utilize the relief garden. From that moment, a close tie developed between gardens and the people in general.
During the great depression, gardening programs were executed in phases. Initially, numerous problems faced the movement of relief gardening, especially in the implementation period. The organizers of the movement were in contention over the sizes, composition, and control of the gardens.
Many people wondered whether the depression would even go on for such a long time to necessitate relief gardens. Those who were to be assisted included the elderly, invalids, unemployed, and those with polygamous families. The effects of the great depression were not caused by the weakness and inability of individuals to provide for themselves and their families but the failure of the governing system (Warman 16). During that period, the ordinary citizens contributed towards Gardening programs. This practice was prominent in Detroit.
In 1933, garden committees were established by non- governmental organizations to assist in mitigating widespread hunger. Owners of land were encouraged to increase their land rather than rely on the gardens that were available in the relief gardens sections. Workers in the gardens were given farm supplies and seeds for planting. Many farmers disliked the idea of welfare gardens since they thought that the program upheld the economic depression by increasing overproduction (Warman 19).
Franklin Delano Roosevelt brought with him (New Deal) when he was elected the president of the United States in 1933. The three years that followed saw work in the garden program receive a three billion dollar fund by the (FERA) Federal Emergency Relief Administration.
The donations given, helped in buying farm supplies such as fertilizers, pesticides, and seeds (Warman 25). The relief gardens provided jobs, food, and a sense of belonging to the population in the great depression era. Relief gardening encouraged people to be self depended and eliminated the possibility of laziness.
The gardens opened a new way whereby people started relying on themselves for food and sustenance. Henceforth, the relief gardens acquired a new name. The gardens are known as depression gardens (Williamson 20), and were named after the era they were invented.
The main objective for establishing the gardens was to help the population save their money on grocery bills by cultivating their own vegetables (Cravens 9). The government realized the dire need of encouraging the population to cultivate their vegetables by even providing incentives such as seeds and farm supplies.
In the era of the great depression, as the need arose, people concentrated more on food gardening as compared to now. Goods that were home canned were worth gold for their weight (Newton 21). In those times, home freezers were not available; therefore, people preserved their food through canning.
Families that lived in areas where there was low humidity preserved their food and fruits on racks placed on top of roofs (Emerson 29). Those racks had to be kept safe from insects and the roving bird in the daytime and had to be returned back inside the houses at night to preventing them from becoming damp. Some people made their racks over the kitchen range, thus avoiding the outside weather conditions. By drying vegetables and fruits, people were able to save on the cost of canning.
Relief gardening also included rearing of poultry. This was done at the backyard; poultry provided meat, eggs, and litter for farmyard purposes. Other animals such as cattle and sheep were also reared to provide manure that also helped in cutting the cost of buying fertilizers (Watkins 15). People with large families used family labor to prepare the land for planting seasons, take care of growing crops, and help in harvesting. Gardening in the great depression helped people to be self-dependent and provide for themselves.
In actual fact, relief gardening helped people to save a lot on vegetable produce since they grew most of the vegetables and fruits directly from their gardens. The main principle used in depression gardening was planning what was to be eaten based on what garden produced; thus, putting a certain limit to what was bought in the food stores (Berton 36).
Saving on the cost of seeds was one of the ways used to cut down and reduce garden costs, and people living in the same vicinity always traded with seeds especially when there was something new in the market. The plant’s people are growing today are hybrids; therefore, preserving seeds is a risky ordeal since hybrid seeds do not always give the same as the mother plants (McElvaine 16).
Those seeds from original reliable selections normally produce a similar type of plants repeatedly again (Mortimer 12). One setback facing the old seed variety is that they are vulnerable to nematodes and plant diseases (Howard 7). The main objective of developing hybrid plants has always been to resist the numerous plagues that affect plants.
In the era of the great depression, the art of gardening was learned through practical experience, since it was a source of livelihood. Currently, someone who is experienced in gardening can get free information and gardening tips from videos, magazines, and books that are locally available in bookstores.
Today, the practice of gardening is not in itself a chore as it was during early days (Pollan 9). Today, there exist tilling machines that have assumed the places of ox, horse, and ass drew plows. All categories of power machines and tools have made the gardening work easier.
The best time to start dealing with an economic catastrophe is before its occurrence. Food cost is rising steadily, and most people are spending a lot of money from their income in supermarkets against their desires (Warner 56). Canned food prices will continue to skyrocket. Due to environmental catastrophes, farmers still make great losses. For instance, farmers were devastated by the 1998 summer in many regions of America, especially across the south.
There is also a likelihood that 30% of Louisiana gardeners may lose their farming jobs because of crop loss due to drought, which have lasted for more than one year. The 1998 drought also left many cattle suffering as the cattlemen searched for other areas where they could get hay to feed their animals, these disasters always translate to elevated prices to customers (Lawson 23).
Through gardening, we are able to raise our own produce, therefore, offsetting some of our food expenses. We are actually lucky that our modern methods of food preservation are not involving and time-consuming (Ellis 16). Our fresh supplies that come from our gardens can be preserved through drying, freezing, or canning and this can save us a lot when prices in the supermarket rise. Means of preparation to combat economic hardships should actually commence as soon as signs of economic depression begin to set in.
Prior to the cultivation period, the rotary tillers should be serviced and put to work. The garden should be located in a place void of big trees and should be open to direct sunlight for at least six to seven hour of the day. In areas where the temperatures go beyond ninety degrees, it is advisable to provide some shade. Barnyard manure, poultry litter, and compost manure are employed before the plantation time (Niñez 5).
Gardeners in the great depression practiced row planting, but nowadays due to the need for easy maintenance, less water, high yield, space saving, easy replanting, and harvesting, elevated gardens are preferred. In the modern gardens, the grass is allowed to grow in between beds, which are four feet apart. String trimmers or mowers are used to control the growth of grass. The grass offers a suitable and comfortable path to walk on, thus avoiding muddy paths.
There are points to consider when choosing the type of vegetation to grow in the gardens since it is of no use to plant crops that look lucrative while growing while at the end they cannot be consumed (Niñez 7). Famers in the era of the great depression used to preserve their vegetables and fruits either by drying or by canning.
These methods are still in use today but in an advanced manner (Ellis 25). Nowadays foods are preserved using refrigeration while others prefer dehydrating fresh vegetables; this is done through advanced technology known as freeze-drying whereby the food to be dried is subjected to very low temperatures then heated at very low pressure. In this method of freeze-drying, the water content in the food escapes through a process known as sublimation.
Conclusion
The relief gardens in great depression provided a source of income and food to the entire population thus, giving people hope to survive, offering relief to economical stress, and provided a sense of satisfaction to those who were in need. Gardens also, as discussed above, are capable of changing people’s lives if taken seriously. Relief gardens opened a way to many farming activities that were not explored before. Different agricultural techniques were embraced, therefore, changing the way of live of different people.
From the time of the great depression, farming was no longer perceived as a noble activity but was viewed as an activity that sustained the lives of many people in times of trouble. The impact of relief gardens is evident up to date since the idea of farming was embraced and is still in use. People stopped viewing gardening as a thing for the poor but rather as a redeeming feature that supported live in the great depression.
Works Cited
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