Politic Science
Thursday October 24 1929 is a Day that was later known as "Black
Thursday".
"Black Thursday" was the day a small crash occurred at the New
York stock
exchange. However "Black Thursday" Would turn out to be nothing
compared to
what awaited America and its economy on the following Tuesday.
America was about
to enter her darkest days the Great Depression. Sena
Peterson my great
grandmother was just an eighteen-year-old young lady living
on her fathers corn
farm in Iowa. Far away from New York and the economic
problems on Wall Street.
Nevertheless, the depression and the falling
prices of her farms product would
soon affect her in drastic ways the
depression would be a hard time for
Americans. Monday October 28, 1929.
Was a very dark and gloomy day. Thousands of
Black Birds landed on Wall
Street. The thousand plus birds began to devour any
thing they could find to
eat. Nearly half of the birds never took flight again.
Many of the birds
died of exhaustion. This was an ominous sign of the dark and
desperate times
ahead. America was about to enter its lowest and darkest point
in its short
history. My great grandma lived on her farm in Iowa oblivious to
the fact
that her life would soon be changing in drastic ways. She had know idea
of
what was going on at Wall Street. She had no idea that she was going to
have
to move. Her family would soon have to start all over in a new place.
Tuesday
October 29, 1929. This dark day would soon be remembered as
"Black Tuesday".
The day Americas economy would crumble. The day some
investors lost everything
even there will to live and jumped out the windows
of high rise buildings. Many
people believe that the stock market crash was
the cause of the depression but
that is not entirely true. Although the two
events where closely related. By
Americans attitude during the 1920’s
also known as the jazz age. Americans
emphasis on having the newest thing or
being at the height of fashion was enough
to keep the economy going for most
of the 20’s but that would no last. During
the First World War my great grand
mothers expanded to keep up with the demand
the war created. To do this they
got a loan from the bank to purchase the need
supplies; machines and the land
needed to expand. After the war ended the demand
for corn drastically
dropped. Consequently, the farm produced an excess product
so the price
dropped. My great grandfather now had problems paying the bill and
making
ends meat but he managed for a while. Nevertheless, the lack of money
would
soon take its toll. The problem with the way America was heading was
that
income was distributed very unevenly and the portion going to the rich
got
larger and larger as the 20’s progressed. Corporations started to make
bigger
and bigger profits yet the profits were not passed on to the workers.
In
addition, in 1926, The Revenue act was passed and it cut taxes by 2/63 for
those
who made over 1 million dollars a year. Because of these trends in
1929, the top
.1 percent of American families had a total income equal to the
bottom 42
percent. That meant that the people who paid attention to the ads
couldn’t
afford the new products they wanted. This is when credit was
invented. People
liked the idea that they didn’t have to pay for the product
but they still got
to keep it and pay later. Credit only put of they day when
consumers accumulated
so much debt that they couldn’t buy new products. My
Great Great grandfather
had tried his best to make ends meat but he couldn’t
make a profit. He could
no longer pay back his loan to the bank so they
foreclosed on his farm. My great
grandmother’s family now had no source of
income and no where to live for them
this was the lowest point of the
depression and her life. However, this where
about get a lot worse for the
Peterson family. Because people could no longer
afford to buy things there
was an over supply and no demand, so prices began to
fall like a rock. So
they economy became weak because nobody was making money.
This is when
stocks began to crash and eventually the whole market crashed.
Things
began to look a lot worse for the Peterson’s my great grandmother’s
father
came down with tuberculoses. The whole Peterson family had to move
to
Colorado so he could get treatment. My great grandmother ended up
working in a
Levi’s factory to help pay medical bills as well as her
mother. Her brothers
worked in other various factories. These events all lead
up to the depression
the stock market crash was the straw that broke the
horses back. After the crash
for the next three years things just got worse
and worse. Americans attitudes
changed from their happy party like attitudes
to a defeat and despair. Stock
prices continued to fall, by 1932 they where
20 percent what they where before
the crash. With little demand many mills
and plants closed. They plants that
here still open in 1932 produced only
half what they did in 1929. There was no
end in sight America looked as if it
where in a never-ending downward spiral.
The Peterson’s continued to work
in factories to pay for the medical bills.
Until her father died. She
continued to work in the factory but some of here
brothers joined the Navy.
She worked in the factory until she got married in
1932 and she started
to do housekeeping to make a living while her husband
worked for a chemical
company called Dow Chemicals. From 1929 to 1932,
unemployment went from 3.2
percent to 24.9 percent. This mean there where 15
million unemployed
Americans. People who had a job where earning very little
money. My great
grandmother husband worked for the chemical plant he didn’t
make enough to
support his family wick included there two suns and doughtier.
Buster and
Glen where the names of there sons. Buster was born in 1930, Glen was
born in
1933, and their doughtier Janice was born in 1936. Many other families
where
not as lucky. As people lost their money and their savings, they could
no
longer pay their loans and mortgages. Banks began to foreclose on them
they lost
everything there houses and all. These unemployed homeless people
lived in
shantytowns in houses made from old crates. These towns would soon
be called
Hoovervilles because Americans where bitter towards there
president. The people
of America where upset at President Hoover because he
refused to give aid to the
unemployed Americans. The way my Great Grandmother
was living was a sharp
contrast to the way it was just a few years. Yet it
was still a tuff time they
could pay the bills and she didn’t have to do hard
work in factories. They way
the government responded to the depression
initially did not help to fix the
problem. President Hoover insisted that
prosperity would soon return to America.
Hoover was convinced that all he
needed to do was to restore people’s
confidence so that companies would
invest and start production again. He
believed that this would create more
jobs and give people incomes and restore
the economy. Nevertheless, business
owners saw no reason to increase production
because there shelves where full
of unsold items. By 1932, production was less
that what it had been in 1929.
President Hoover also believed that a balanced
budget was the key to
restoring the economy. Hoover decided to cut government
spending and increase
taxes. All Hoover’s plan did was reduced demand to an
all time low.
Eventually Hoover provide emergency loans to banks and industrial
companies.
President Hoover also expanded public works and helped states offer
relief.
However, his efforts where too little, too late. President Hoover was a
self
made man and as such he strongly believed in individualism and
self-reliance.
More and more Americans began to loose their jobs Hoover said
that "mutual
self help through voluntary giving" was the way to meets
peoples needs.
Charities began to be overwhelmed at the number of people that
needed help.
To most people government assistance was the only way to help
fix
Americas economic problems. Hoover thought that giving government
help would
undermine recipient’s self-reliance and he refused to do it the
entire time he
was in office. In 1932, there was an election and democrat
Franklin Delano
Roosevelt would run against the very unpopular and
somewhat hatted President
Hoover. Many people believed that Roosevelt
would win by a landslide and he did
in the fall of 1932. Roosevelt was a very
confident person unlike Hoover. In his
inauguration speech, he said, "The
only thing we have to fear is fear itself
". Soon Americans spirits would
be lifted. Days after his inauguration
Roosevelt called special sessions
with congress where there where several
emergency legislation was passed.
These new legislation where called The New
Deal The basic idea of the new
deal was to lower the supply of goods to the
current depressed level. The New
Deal also tried to increase demand by putting
large amounts of money into the
economy through the Public Works program. The
Public Works program
provided jobs and it built schools dams and roads. The new
deal was not a
cure for the depression it acted like a painkiller lessening the
burden on
Americans and making condition bearable. Unemployment was reduced and
framers
could now sell their crops for a profit. However, the depression was
not
over. The depression is thought to be over around the time the Second
World War
started. The demand the war created helped fix the economy
companiese could sell
their products there was now the demand was equal to
the supply. The economy was
fixed. America was once more a prospering
country.