United States and the Great Depression
In 1918, the United-States go out strengthened by the war. Situated in the camp of the winners, the country did not undergo the dramatic destructions of a part of Europe and the human losses are limited. USA even acquired an excellent military scale. The maritime business peaked and New York supplanted London in thefinancial business. Most of the European countries are put into debt: the Americans demand the repayment of the ten billion lent dollars. However the American Senate refuses to participate in League of Nations and so renews with the intentions of the isolationism.
As in Europe, years 1919-1920 are difficult in the United States: it is necessary to reconvert the war economy and to face theinflation. The end of the State Planned Economy set up in 1917 and the rise of the trade unionism provoke numerous strikes in all the country. In 1919, 4.1 million strikers who demand better salaries and a reduction of working hours were listed. They often degenerated in a violent way and confrontations took place in several big cities, as in Boston. Year 1920 is marked by numerous anarchisticattacks.
However it was during the 1920s that the United States experienced a period of economic prosperity. The latter was responsible for what we later called the Great Depression. It was necessary to wait for the arrival of Franklin D. Roosevelt and the institution of New Deal to notice the beginning of a very slow economic evolution.
1) The American prosperity of the postwar.
i) Signsof prosperity
1) United States become the first economic power in the world.
a) Financially speaking, Wall Street replaces the London Stock Exchange as the first financial center.
b) From 1922 there is strong economic growth, symbolized by businessmen, and the powerful “Trusts”.
2) A new era began: the second industrial revolution.a) Based on hydrocarbons (oil) and electricity.
b) New methods of working appeared, such as Taylorism.
ii) The limits of American prosperity.
1) An America at the same time liberal on the economic plan and conservative : “America First”.
a) The U.S isolationism.
b) A puritan America.
c) An America where racism is verypresent.
d) There is no prosperity for farmers; they are too indebted to survive.
2) The economic crisis of 1929.
i) The causes of the crisis.
1) An excessive stock market speculation and the production crisis.
a) Credits and sales of shares.
b) The production is too important compared to what Americans can consume. The demand does notfollow the offer.
c) On October 24, 1929, the stock market crash: 13 million shares are putting on sale, the prices collapsed: It is the Black Thursday/ Black Ocotober.
ii) A chain reaction crisis
1) The Crisis hits several sectors.
a) From the Stock Market, the crisis spread to the banking sector.
b) By facing this crisis, the industriesare forced to lower their production.
iii) The crisis enlarge upon the world.
1) Reduction of trades and rising bankruptcies.
a) Situation in Germany, England and France.
b) On both sides of the Atlantic appears a reduction of trades.
2) Only the Soviet Union, isolated since the end of the N.E.P in 1928, is spared.
a) Thecrisis of 29 becomes for Stalin and the communists a proof of the failure of the capitalism.
3) ROOSEVELT and the NEW DEAL (1933-1941)
i) The Democrats take over
1) The decline of the Republican government of J. Edgar. Hoover.
a) Implementation of any measure: “Let’s make”policy .
b) Example of the unpopularity of Hoover : Slums called “Hooverville”...
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