Prevention Of Future Depressions
Prevention Of Future Depressions
During the year 1929, an American Tragedy occurred; A tragedy that would change the course of American History as we know it; A tragedy that Americans will never come to forget. Within the span of 24 hours on October 29, 1929, American stocks crashed down $40 billion and the Great Depression had just begun. Over the course of the following year, American citizens struggled to stay employed, let alone feed their families in some cases. Due to this tragedy, steps were taken by Herbert Hoover and Franklin Roosevelt along side the US Government to ensure that American citizens could recover and attempt as best possible to prevent a relapse of this tragedy.
Unfortunately for Herbert Hoover, Republican, he was inaugurated into office at the beginning of a difficult era. During his first year on October 29, 1929 the stock market crashed and the United States lost $40 billion. This was the start of The Great Depression. 1Although Hoover was cursed with a difficult job at the beginning of his term, he had to attempt to address the situation the best he could. After all, as stated by Valtaire, with great power comes great responsibility. So Hoover’s idea of a solution would be to implement a tariff on traded goods. But, “Hoover`s administration made a bad mistake when Congress, caving in to special interests, passed the Smoot-Hawley Tariff Act in 1930. The measure would hike up tariffs to prohibitively high levels. The president signed the bill into law over the objections of more than 1,000 economists. Every major trading nation protested against the law and many immediately retaliated by raising their tariffs. The impacts on international trade were catastrophic. This and other effects caused international trade to grind nearly to a standstill; the depression spread worldwide.”2 During the Great Depression, Over 5,000 Banks failed, more than 32,000 other industries went bankrupt, small businesses struggled and unemployment rates dropped tremendously In America. The Great Depression was an extremely difficult time for many citizens, but America would not be Hooverville forever.
In the Year 1933, Franklin D. Roosevelt, Democrat, was inaugurated into office. Upon entry Roosevelt recites his famous quote that inspires Americans to push forward. The quote states, “Let me assert my firm belief that the only thing we have to fear is, fear itself — needless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”3 Upon entering office, Roosevelt promised to implement a change into the United States Government. This change was known as the New Deal. This New Deal was aimed at providing relief to the citizens’ financial crisis by reforming business and agricultural practices. Over the short span of three months, Roosevelt persuaded the US Congress to pass a series of laws to further the goal of the New Deal. Due to the beneficial changes caused by these new laws and speed in which they were passed and enacted, the session of Congress became known as The Hundred Days.4
Some of the acts put in place by FDR and The Hundred Days include:
-The Federal Emergency Relief Administration to administer $3 billion of relief or wages for public workers, led by Harry Hopkins.
-The Civilian Conservation Corps (CCC) put about 3 million men to work building roads, doing forest labor and managing flood control.
-“The Emergency Banking Act provided the president with the means to reopen viable banks and regulate banking”5 as well as a law that insured bank deposits up to $5,000.
-The new Home Owners Loan Corporation (HOLC) was established to assist homeowners.
-The Agricultural Adjustment Administration (AAA) was implemented to assist qualified farm owners with crop production.
-The Tennessee Valley Authority (TVA) was one of the most effective due to its ambitious goal of establishing hydroelectric plants in government dams to take advantage of the great river basin’s resources.
-The National Recovery Administration (NRA) was put into act attempting to revive industries by reducing working hours and raising wages but was declared unconstitutional by the Supreme Court.
-The Wager Act of 1935 allowed Employees guaranteed negotiation rights with their employers by means of a union; this act also set off the American Federation of Labor.
-The Fair Labor Standards Act of 1938 set some ground rules for employment in America including: a minimum wage of 25 cents per hour which will gradually rise to 40 cents per hour; 44-hour work week which will gradually be lowered to a 40 hour work week with time-and-a-half for overtime; and lastly, children under the age of 16 are prohibited from working. 6
Although these acts played a significant roll in assisting the restoration of the United States economy, the factor that gave the US economy the amount of push it needed was the attack on Pearl Harbor in December 1941. Just the general idea of being at war gave Americans the drive to do whatever they could to help their country, but when the Japanese hit Pearl Harbor it became personal. This tragic act was sadly exactly what America needed to shoot them out of this economic slump. In the year following the attack on Pearl Harbor, the president called for mass production of military vehicles. He wanted 20,000 antiaircraft guns, 60,000 warplanes, 45,000 tanks and 18 million tons of merchant shipping.7 Due to these outrageous demands, farms, mines, trading houses, labor, factories, investment firms, educational institutions, and communications were all enlisted into the war effort. This allowed money to start flowing throughout America once more and newfound employment.
Even though America was able to dig itself out of the depression this time, Roosevelt felt it would be a good idea put in place preventative measures. Congress enacted the Social Security laws in 1935. These laws “provided pensions to the aged, benefit payments to dependent mothers, crippled children and blind people, and unemployment insurance”8. These laws, minus slight alterations, are still in place today and have kept the American economy out of critical national depression thus far.
The wise Benjamin Franklin once said, “By failing to prepare, you are preparing to fail”. The American Government definitely digested this concept when creating the social security laws. Due to these laws, the outstanding efforts of the American Government and the war effort of American Citizens, the US was able to pull out of this treacherous slump and continue on to be forged into the great nation it has become today!
Word Count: 1009 words
Unfortunately for Herbert Hoover, Republican, he was inaugurated into office at the beginning of a difficult era. During his first year on October 29, 1929 the stock market crashed and the United States lost $40 billion. This was the start of The Great Depression. 1Although Hoover was cursed with a difficult job at the beginning of his term, he had to attempt to address the situation the best he could. After all, as stated by Valtaire, with great power comes great responsibility. So Hoover’s idea of a solution would be to implement a tariff on traded goods. But, “Hoover`s administration made a bad mistake when Congress, caving in to special interests, passed the Smoot-Hawley Tariff Act in 1930. The measure would hike up tariffs to prohibitively high levels. The president signed the bill into law over the objections of more than 1,000 economists. Every major trading nation protested against the law and many immediately retaliated by raising their tariffs. The impacts on international trade were catastrophic. This and other effects caused international trade to grind nearly to a standstill; the depression spread worldwide.”2 During the Great Depression, Over 5,000 Banks failed, more than 32,000 other industries went bankrupt, small businesses struggled and unemployment rates dropped tremendously In America. The Great Depression was an extremely difficult time for many citizens, but America would not be Hooverville forever.
In the Year 1933, Franklin D. Roosevelt, Democrat, was inaugurated into office. Upon entry Roosevelt recites his famous quote that inspires Americans to push forward. The quote states, “Let me assert my firm belief that the only thing we have to fear is, fear itself — needless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”3 Upon entering office, Roosevelt promised to implement a change into the United States Government. This change was known as the New Deal. This New Deal was aimed at providing relief to the citizens’ financial crisis by reforming business and agricultural practices. Over the short span of three months, Roosevelt persuaded the US Congress to pass a series of laws to further the goal of the New Deal. Due to the beneficial changes caused by these new laws and speed in which they were passed and enacted, the session of Congress became known as The Hundred Days.4
Some of the acts put in place by FDR and The Hundred Days include:
-The Federal Emergency Relief Administration to administer $3 billion of relief or wages for public workers, led by Harry Hopkins.
-The Civilian Conservation Corps (CCC) put about 3 million men to work building roads, doing forest labor and managing flood control.
-“The Emergency Banking Act provided the president with the means to reopen viable banks and regulate banking”5 as well as a law that insured bank deposits up to $5,000.
-The new Home Owners Loan Corporation (HOLC) was established to assist homeowners.
-The Agricultural Adjustment Administration (AAA) was implemented to assist qualified farm owners with crop production.
-The Tennessee Valley Authority (TVA) was one of the most effective due to its ambitious goal of establishing hydroelectric plants in government dams to take advantage of the great river basin’s resources.
-The National Recovery Administration (NRA) was put into act attempting to revive industries by reducing working hours and raising wages but was declared unconstitutional by the Supreme Court.
-The Wager Act of 1935 allowed Employees guaranteed negotiation rights with their employers by means of a union; this act also set off the American Federation of Labor.
-The Fair Labor Standards Act of 1938 set some ground rules for employment in America including: a minimum wage of 25 cents per hour which will gradually rise to 40 cents per hour; 44-hour work week which will gradually be lowered to a 40 hour work week with time-and-a-half for overtime; and lastly, children under the age of 16 are prohibited from working. 6
Although these acts played a significant roll in assisting the restoration of the United States economy, the factor that gave the US economy the amount of push it needed was the attack on Pearl Harbor in December 1941. Just the general idea of being at war gave Americans the drive to do whatever they could to help their country, but when the Japanese hit Pearl Harbor it became personal. This tragic act was sadly exactly what America needed to shoot them out of this economic slump. In the year following the attack on Pearl Harbor, the president called for mass production of military vehicles. He wanted 20,000 antiaircraft guns, 60,000 warplanes, 45,000 tanks and 18 million tons of merchant shipping.7 Due to these outrageous demands, farms, mines, trading houses, labor, factories, investment firms, educational institutions, and communications were all enlisted into the war effort. This allowed money to start flowing throughout America once more and newfound employment.
Even though America was able to dig itself out of the depression this time, Roosevelt felt it would be a good idea put in place preventative measures. Congress enacted the Social Security laws in 1935. These laws “provided pensions to the aged, benefit payments to dependent mothers, crippled children and blind people, and unemployment insurance”8. These laws, minus slight alterations, are still in place today and have kept the American economy out of critical national depression thus far.
The wise Benjamin Franklin once said, “By failing to prepare, you are preparing to fail”. The American Government definitely digested this concept when creating the social security laws. Due to these laws, the outstanding efforts of the American Government and the war effort of American Citizens, the US was able to pull out of this treacherous slump and continue on to be forged into the great nation it has become today!
Word Count: 1009 words
Footnotes
1: Online Highways LLC
2: Online Highways LLC
3: Online Highways LLC
4: “enotes” Agrawala, Krishna
5: Online Highways LLC
6: Online Highways LLC
7: Online Highways LLC
8: Online Highways LLC
2: Online Highways LLC
3: Online Highways LLC
4: “enotes” Agrawala, Krishna
5: Online Highways LLC
6: Online Highways LLC
7: Online Highways LLC
8: Online Highways LLC