Storia e Istituzioni degli Stati Uniti

The great depression

The Great Depression was a period of worldwide economic crisis. It started in America in 1929 and then spread to Europe and the rest of the world. The depression had devastating effects in almost every country, both rich and poor.

The Wall Street Crash

On the 24 October 1929 and again on the 29th (Black Tuesday) share prices on Wall Street (the New York Stock Exchange) fell dramatically. This fall became known as the Wall Street Crash and it led to the Depression, which hit the USA in October 1929 and then spread to most countries in the world.

What caused the Wall Street Crash?

• In the 1920s, share prices in the USA rose year after year. Many Americans believed they could make money easily by investing in shares.
• Share prices went up because companies encouraged people to buy on credit. This was a really dangerous practice because eventually people would not be able to make their repayments.
• The US government did not believe that it had any responsibility for what was happening. The presidents in the 1920s, Warren Harding and Calvin Coolidge, believed that it was not their job to interfere.
• Some Americans predicted that a crash was coming, but very few people took them seriously. Most people believed that the USA was so wealthy and so powerful that it could not happen. They were wrong.

What happened in the following years?

• The Crash led to an enormous loss of confidence on the part of the millions of Americans who had invested on Stock Exchange. Instead of investing and spending, people now began to save. All over the USA, people began to withdraw money from banks. Many banks collapsed as people withdrew their money.
• Many companies went bankrupt as people stopped spending and millions of people lost their jobs.
• Unemployed often lost their homes and were forced out onto the streets. The economic crisis in the USA soon spread across the world.

The depression in Europe

The economic crisis in the United States soon spread around the world. Serious economic problems also occurred in Europe, which had already suffered devastating loss of property and finances during the First World War. In 1933 the government, being there many unemployed, paid a weekly sum of money, called "dole" to these people. But unemployment was a lasting problem; in fact, in 1938, there were still about 1.8 million people without work.

The New Deal

In 1933, a new American government led by Franklin D. Roosevelt introduced a package of economic programmes known as the New Deal. Its goal was to help the unemployed, reform business and financial practices and promote recovery. Banks were able to reopen, but were more closely regulated and savings better protected. Currency and foreign exchange were controlled and loans were made to support farmers. Many of the measures proposed in the New Deal were controversial, but they provided employment for five million people and so restored confidence.

The 20th century

In 1914 the 1st World War started.

In 1917 the USA entered the war.

The war ended in 1918.

In 1939 the 2nd World War started (France and Britain against Germany). The USA sided with France and Britain, supplying war material to the Allies but was not at war.

On the 7th December 1941 the Japanese attacked the American naval base in Pearl Harbour, Hawaii. In the surprise attack, hundreds of Japanese fighter planes destroyed or damaged 18 American naval ships and hundreds of planes and many people died. The following day US Congress declared war on Japan.

In 1945 the USA dropped nuclear bombs on Hiroshima and Nagasaki, the Japanese surrendered and the war ended. Unlike Britain, the USA was in a strong economic position after the war and started to dominate the world economy.

At the end of the Second World War (1939-1945), after years of fighting and bombing, Europe was in ruins both physically and economically. Industries had been destroyed, transport and infrastructure had been damaged and there were extreme food lacks as agricultural production had virtually stopped. The United States of America was the only major nation whose economy was relatively undamaged after the conflict.

On 5th June 1947 the US Secretary of State, George Marshall, gave a speech at Harvard where he introduced his plan to help Europe recover from this situation, a plan officially known as the European Recovery Program, but commonly called the Marshall Plan.

The Marshall Plan was a program which provided food and important goods necessary for the survival of country and, of course, financial. It also included helping restart the economies of the 17 participating countries, providing them with efficient American business and production techniques and models, as well as with loans and grants for industrial investment. In total, between 1948 and 1951, US$13 billion of aid were given which contributed to increasing productivity, stimulating economic growth and trade, and improving living conditions.

The Seventeen nations were Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, the United Kingdom and West Germany.

Another important country was the USSR (Russia) with powerful economic. It was a communist country.

The Cold War

Much of the second half of the 20th century was marked by the Cold War between the world’s superpowers, the USA and the USSR. The world was divided in 2 blocks: on one side were the United States and the Western Block (Italy, France, Western Germany, etc.), on the other side were the Soviet Union and the Eastern Block (East Germany, Yugoslavia, Romania, Bulgaria, etc). Even before the Second World War, there was a lot of fear of communism, (Red Scare) in the USA and that it could