Sunday, April 12, 2009

The Effects of the Great Depression (3)

The nation's economic health that was poor in 1930 continued to deteriorate. In July, 1931 unemployment reached 7,000,000. During 1931 there were 2,294 bank failures, double the amount of those in 1930. In September of the same year U.S. Steel began cutting wages of over 200,000 employees by 10 % . 800 more banks were closed, while Individuals began hoarding gold.(1)

On February 27, 1932 Congress passed the Glass-Steagalll Act, which authorized the sale of $750,000,000 worth of the Government's huge gold supply and allowed the Federal Reserve System more leeway in discounting commercial paper. The purpose of the measure was to counteract the hoarding of gold and to ease credit. With economic conditions continuing to worsen, on July 15, 1932 President Hoover announced that he was taking a 20 % salary cut. On July 22, 1932 the Federal Home Loan Bank Act became law, creating 12 regional banks with a capital of $125,000,000 to discount home loans for building and loan associations, savings banks, and insurance companies. President Hoover's hope was that the act would stimulate residential construction, increase employment, and expand home ownership.(1)

The weeks between the election in November and the inauguration in March were the most depressing the nation had witnessed. Unemployment had reached an estimated peak of 15,000,000. More than two hundred cities were facing bankruptcies. Across the nation property was being forfeited and millions of people were loosing their hard-earned equities and becoming homeless.. Those who had money would hoard it. Steel plants, automobile factories, and other industries were at an all time low in production. The situation was desperate. (2)

On July 28,1932, an army of unemployed veterans went to Washington and encamped on government property. Though the veterans were well disciplined and acting in a peaceful way, they were driven out by tanks, cavalry, infantry and machine gun troops. In this encounter two men were shot, 1000 men, women and children were gassed. This was one of the worst exhibitions of official blundering and cruel oppression the country had ever witnessed.

To be continued: The Effects of the Great Depression (4)


1. _________The Bicentennial Almanac; edited by Calvin D. Linton Ph.D; Thomas Nelson Inc. (1975)

2. Dumond, Dwight Lowell; "America in Our Time" 1896-1946; Henry Holt and Company (1937)



1 comment:

Anonymous said...

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