HIST 405N Week 6 Discussion 1: The New Deal (2 Versions)

HIST 405N Week 6 Discussion 1: The New Deal (2 Versions) What were the underlying causes of the depression? Why did the Great Depression of the 1930s seem so much worse than any occurring either before or since? The Great Depression lasted from 1929 to 1939 and was the worst economic depression in the history of the United States. Economists and historians point to the stock market crash of October 24, 1929, as the start of the downturn. But the truth is that many things caused the Great Depression, not just one single event. The economic downturn wasn't just confined to the United States; it affected much of the developed world. One cause of the depression in Europe, was that the Nazis came to power in Germany, sowing the seeds of World War II. Remembered today as "Black Tuesday," the stock market crash of October 29, 1929, was neither the only cause of the Great Depression or the first crash during that month. The market, which had reached record highs that same summer, had begun to decline in September. On Thursday, October 24, the market plunged at the opening bell, causing a panic. Though investors managed to stop the slide, just five days later on "Black Tuesday" the market crashed, losing 12 percent of its value and wiping out $14 billion of investments. Two months later, stockholders had lost more than $40 billion dollars. Even though the stock market regained some of its losses by the end of 1930, the economy was devastated. The effects of the stock market crash rippled throughout the economy. Nearly 700 banks failed in the later months of 1929 and more than 3,000 collapsed in 1930. Federal deposit insurance was unheard of at this time, so when the banks failed, people lost all their money. Some people panicked, causing bank runs as people desperately withdrew their money, forcing more banks to close. By the end of the decade, more than 9,000 banks had failed. Surviving institutions, unsure of the economic situation and concerned for their own survival, became unwilling to lend money. This made the situation worse, causing less spending. With investments worth little to nothing, savings diminished, and credit became tight to nonexistent, spending by consumers and companies came to a standstill. As a result, workers were laid off. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans. More and more inventory began to accumulate. The unemployment rate rose above 25 percent, which meant even less spending to help alleviate the economic situation. It became an unstoppable snowball of events. As the Great Depression tightened its grip on the nation, the government was forced to act. Vowing to protect U.S. industry from overseas competitors, Congress passed the Tariff Act of 1930, better known as the Smoot-Hawley Tariff. The measure imposed near-record tax rates on a wide range of imported goods. A number of American trading partners retaliated by imposing tariffs on U.S.-made goods. As a result, world trade fell by two-thirds between 1929 and 1934. The economic devastation of the Great Depression was made worse by environmental destruction. A years-long drought combined with farming practices which did not use soil-preservation techniques created a vast region from southeast Colorado to the Texas panhandle that came to be known as the dust bowl. Massive dust storms choked out towns, killed crops and made people and livestock sick and caused millions in damage. Thousands of people fled the region as the economy collapsed. It would be years, if not decades, before the region's environment recovered. There were many causes of the Great Depression, “Some industries, especially textiles and mining, suffered throughout the twenties from over production and falling demand. By 1929, even the automobile, construction, and appliance industries found it difficult to turn a profit.” (Keene, pg. 656) Although the U.S. has experienced significant economic downturns prior to and since the Great Depression, no other economic downturns have matched the severity or duration. Can you see any modern parallels to the Great Depression? Elaborate. The Great Depression and the 2008 Financial Crisis had many similarities. A period of stability leading to high leverage and a financial crisis were common to both. The major difference was contractionary policy during the Great Depression and expansionary policy during the 2008 financial crisis. There are also some similarities between the 2001 recession and the Great Depression. Both economic downturns followed periods of extraordinary business investment, productivity growth, and economic booms as well as sharp declines in business investments and stock values over a period of several years. Thank You. Jodi References: Chamberlain College of Nursing (2019). HIST405 United States History: Week 6 lesson. Downers Grove, IL: Online Publication. Keene, J.D., Cornell, S. & ODonnell, E.T. (2013). Visions of America: A history of the United States. Boston: Pearson. Discussion 2 – Week 6 What were the underlying causes of World War II? The main long-term causes of World War II were Italian fascism in the 1920s, Japanese militarism and invasions of China in the 1930s, and especially the political takeover in 1933 of Germany by Hitler and his Nazi Party and its aggressive foreign policy. Japanese Expansion In the period before World War II, Japan was growing rapidly. However, as an island nation they did not have the land or the natural resources to sustain their growth. Japan began to look to grow their empire in order to gain new resources. They invaded Manchuria in 1931 and China in 1937. Fascism With the economic turmoil left behind by World War 1, some countries were taken over by dictators who formed powerful fascist governments. These dictators wanted to expand their empires and were looking for new lands to conquer. The first fascist government was Italy which was ruled by the dictator Mussolini. Italy invaded and took over Ethiopia in 1935. Adolf Hitler would later emulate Mussolini in his takeover of Germany. Hitler and the Nazi Party In Germany, Adolf Hitler and the Nazi Party rose to power. The Germans were desperate for someone to turn around their economy and restore their national pride. Hitler offered them hope. In 1934, Hitler was proclaimed the "Fuhrer" (leader) and became dictator of Germany. Hitler resented the restrictions put on Germany by the Treaty of Versailles. While talking about peace, Hitler began to rearm Germany. He allied Germany with Mussolini and Italy. Then Hitler looked to restore Germany to power by expanding his empire. He first took over Austria in 1938. When the League of Nations did nothing to stop him, Hitler became bolder and took over Czechoslovakia in 1939. Hitler believed in a rightful expansion of the homeland of the German people and ruled Nazi Germany through a lens of anti-Semitic hatred. Hitler ignored the Treaty of Versailles and greatly expanded the number of German troops. Appeasement After World War 1, the nations of Europe were weary and did not want another war. When countries such as Italy and Germany became aggressive and began to take over their neighbors and build up their armies, countries such as Britain and France hoped to keep peace through "appeasement." This meant that they tried to make Germany and Hitler happy rather than try to stop him. They hoped that by meeting his demands he would be satisfied and there wouldn't be any war. As part of their appeasement policy, Britain and France agreed to let Hitler have part of Czechoslovakia in the Munich Agreement. Czechoslovakia had no say in the deal. The Czechoslovakians called the agreement the "Munich Betrayal." Unfortunately, the policy of appeasement backfired. It only made Hitler bolder. It also gave him time to build up his army. Great Depression The period before World War II was a time of great economic suffering throughout the world called the Great Depression. Many people were out of work and struggling to survive. This created unstable governments and worldwide turmoil that helped lead to World War II. Factors such as mass unemployment in Germany and poverty in Japan provoked considerable anger among the citizens, causing them to be swayed by dictatorial governments which made it acceptable to forcefully loot from other countries whenever they wanted. Most leaders, including Hitler, were opportunists who seized power by directing their citizen's anger and hatred towards other countries. Anger was used by governments as a tool to control the people, who could easily be swayed by promises of jobs and a better quality of life. German Invasion of Poland Germany invaded Poland on September 1, 1939. Two weeks late, the Soviet Union followed suit. This is seen as the main point at which World War II began. Following the German attack, France and Britain both declared war on Germany. Select one event that you think irrevocably led the world (and the U.S.) to war more than any other event. Argue your selection with details that support your answer. The Attack of Pearl Harbor President Roosevelt suggested that when Japan attacked Pearl Harbor the Japanese had been following German instructions. In fact, Hitler and German military did not know about the proposed Pearl Harbor strike. They were, however, aware that the Japanese were preparing actions in Southeast Asia that would probably lead to war with Britain, and possibly with the US. Under the Tripartite Pact, signed with Japan and Italy in September 1940, Germany was obliged to go to war only if the USA attacked Japan, not if Japan attacked the US. Just before the outbreak of war, the Germans secretly agreed to support the Japanese if they went to war with the US for any reason, including a Japanese attack on American territory. President Roosevelt knew about this agreement from intercepted Japanese diplomatic correspondence. As a result, when he asked Congress for a Declaration of War on December 8th Roosevelt requested action only against Japan. In view of isolationist sentiment in the United States, the White House deemed it advisable to let the Germans make the first declaration of war, which Hitler announced in the Reichstag on December 11th. After this the president turned again to Congress and received a unanimous declaration of war against Germany and Italy. The attack did change the strategic situation. The pre-war military strategy of Britain and the US was to assemble strong forces in the west (at Singapore) and the east (at Hawaii), to deter Japan by threatening a two-front war. Pearl Harbor removed the American part of the deterrent. It made possible the rapid conquest of Malaya, the Philippines and the Dutch East Indies. Admiral Yamamoto had hoped to destroy the American carrier force, and this did not happen. By mounting a surprise attack without a declaration of war, on a Sunday morning and killing several thousand Americans, the Japanese put American public opinion totally behind the war effort. Japan had underestimated the Americans, who they believed would prefer to negotiate rather than fight. To the contrary, America wanted revenge. Although deeply divided over war issues and neutrality before Pearl Harbor, the U.S. Congress was now united in seeking a declaration of war. References: Keene, J.D., Cornell, S. & ODonnell, E.T. (2013). Visions of America: A history of the United States. Boston: Pearson.