Could It Happen Again: The Economy

On October 29, 1929, a dark day in American history, the stock market crashed.  Later on labeled as “Black Tuesday,” this significant time in history was caused by a number of events.  The total amount lost for “Black Tuesday” was around $15 billion while the weekly loss was $30 billion.  Due to the stock market crash people tried to take all of their money out of the banks at once which resulted in a shortage of money because the banks could not supply that amount of cash.  The crash triggered a chain of disastrous events that led to the people’s loss of faith in the government and ultimately the Great Depression.  Through the course of the years that the depression lasted, several awful things took place for the American people which will be discussed later on.  It seemed that nothing would be able to cure the depression until American involvement in World War II became inevitable.  Although war is a horrendous event for a country to endure, involvement in World War II was able to pull America out of the Great Depression and turn several things around for the American economy and its people.

By 1932 the international trade that America was involved with had fallen by two- thirds.  Fast forward seven years we begin to see America progressing in pulling out of the Great Depression with involvement in World War II.  One of the first ways that America becomes involved in the war is not actually through direct contact in the fighting.  The United States first gets involved by supplying countries with war materials.  The materials that were supplied were things such as tanks, boats of all different size and firepower, weapons, uniforms, and many other items.  Between 1941 and 1945 the United States supplied countries such as the United Kingdom, the Soviet Union, China, France and other allied nations.  President Theodore Roosevelt started this process in 1941 which was known as the Lend-Lease Act.  He started this shortly after he was elected and he came up with the “lend-lease” as a scheme for sending aid to Britain without demanding payment.  Roosevelt compared this act as lending a garden hose to a neighbor whose house was on fire.  This somewhat surprised Americans because the U.S. was saying that they were neutral but this way of lending to countries dissolved the idea of neutrality.  Although many Americans didn’t agree with this idea of helping other countries when the U.S. was supposed to remain neutral, it was helping boost the international trade problem that was felt during the Great Depression.  In return for the lend-lease to other countries, the U.S. was able to attain military bases in Newfoundland, Bermuda, and the British West-Indies.  Even though America wasn’t requiring for countries to repay them if they received goods before the termination date, it did help us in many ways progress from the hard times of the depression.  The U.S. was able to attain several military bases that would prove helpful in future years; it opened doorways for future trade with countries, provided national income for countries that wished to trade with America after the termination date for lend-lease.  This was one of the first ways that World War II helped with the recuperation of the American market after the Great Depression.