The Sum of Our Dreams by Louis P. Masur

Author:Louis P. Masur
Language: eng
Format: epub
Publisher: Oxford University Press
Published: 2020-11-15T00:00:00+00:00

Depression

Statistics are not stories, yet they suggest stories. The stock market’s Dow Jones Industrial Average fell from a peak of 381 in September 1929 to a low of 41 in July 1932. The gross national product plummeted from 104 billion in 1929 to 56 billion in 1933. Unemployment soared from 3.2 percent to a peak of nearly 25 percent in 1933. In Harlem, it reached twice that. Forty percent of all farms in Mississippi were up for auction in 1933. The fertility rate (children born to women age 15–44) dropped 20 percent. Suicide rates climbed from 12.1 per 100,000 to 18.1 in 1929 and remained at 15.4 throughout the 1930s.

Events as widespread and cataclysmic as the Great Depression have many causes. Its origins rested in the aftermath of World War I. Global trade became more restricted and new tariffs restrained the flow of goods. The Smoot-Hawley tariff, passed in 1930 in the aftermath of the stock market crash, only worsened matters by reducing trade. After World War I, the United States had become a creditor nation, but restrictive trade policies meant other countries could sell fewer goods and not repay their debt to the American banks from which they had borrowed. Domestically, Americans took advantage of easy credit at high interest rates (up to 30 percent) to finance their changing lifestyles as the economy grew and incomes increased across the 1920s. “Every free-born American has a right to name his own necessities,” declared one advertising magazine in 1926. In 1928, however, the Federal Reserve (created in 1913) tightened available credit and increased the interest rate charged by banks for borrowing. Deflation ensued and the Fed failed to increase the money supply. As foreign nations and American citizens found it increasingly difficult to borrow and to pay debts, the economy began to sputter. At the same time, people became enamored with the stock market. Investors purchased stocks on margin, with borrowed money, and banks faced enormous financial risk when stock prices plummeted. In 1930, some 700 banks failed; in 1933, as many as 4,000 closed. Depositors lost billions of dollars, their savings gone. Joseph P. Kennedy, who sold off his portfolio weeks before the crash, supposedly said he knew the time to get out had come when the shoeshine boy gave him a stock tip.13

It fell to Herbert Hoover to do something about the spiraling crisis. If we are to believe Calvin Coolidge, in whose cabinet Hoover had served, the prospects were not good. “That man has offered me unsolicited advice for six years, all of it bad,” lamented Coolidge. Hoover approached the crisis with an overriding belief in self-help, volunteerism, and community cooperation—not in relief efforts spearheaded by the federal government. His President’s Organization of Unemployment Relief furnished funds only to relief agencies, not directly to the people. He opposed a congressional bill that would have provided food to drought victims. He helped defeat a Federal Emergency Relief Bill. The severity of the Depression eventually forced him to yield on

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.