What Caused the Great Depression

Civil War and Reconstruction

A sense of Christian mission motivated people like Jane Addams to help immigrants in the US. The progressive movement attracted people who were motivated by this desire to do good to their neighbors, to those less fortunate than themselves. Addams and Hull House were a prime example of this: “She wished to do things with, not just for, Chicago’s Poor” (Roark). Overall, the movement consisted of urban reformers, and an alignment between the middle class and activists and social workers.

To advance the progressive agenda, Theodore Roosevelt promoted regulating business to prevent businesses from taking advantage of the poor and the immigrants and children who worked in factories for long hours. Consumer protections were another way he did this, especially after The Jungle was published, which triggered a social response among readers (Filler).

A big portion of the American public and leaders and politicians believed in staying out of European conflicts. This sentiment was rooted in the U.S.'s historical tendency to avoid "entangling alliances" and foreign wars. Progressives like those in the Women’s Movement were anti-war. However, in order to get the right to vote, the Women’s Movement pledged to support the war effort (Marsden).

Reasons for involvement in the war were found in various places. Germany's policy of sinking any ship around the British Isles, including civilian and neutral ships, angered some Americans. The sinking of the Lusitania in 1915 that killed several dozen Americans was also majorly influential in reversing Americans’ minds on the matter. President Wilson also framed the war as a struggle for democracy and wanted to have a part on the global stage to push his League of Nations, which he could not do if the US stayed out of the war. He believed that the world "must be made safe for democracy" and that a world with more democratic nations would be more peaceful (Roark).

Stock prices soared in the 1920s and many people bought with borrowed money. When the market crashed, there were many bank failures. The prosperity of the 1920s was also uneven. Only a small percentage of the population had all the wealth, much like today. This also meant that consumer demand was not really that great. Then the Federal Reserve raised interest rates, which made borrowing more expensive and reduced consumer spending even more and business expansion dried up all at once. When stocks fell, many people and businesses were wrecked financially.

The Depression was thought to have discredited the laissez-faire economic policies of the 1920s. People wanted government intervention in the economy. The Democratic Party, under Franklin Roosevelt, implemented a series of reforms known as the New Deal. The role and size of the federal government expanded greatly as a result. It was at this point that the US started implementing social welfare policies (Roark).

Immediate actions were taken to address the suffering of the unemployed. This included programs like the Civilian Conservation Corps (CCC) and the Public Works Administration (PWA) that provided jobs. Efforts were made to stimulate the economy and get it back on track. The National Industrial Recovery Act (NIRA) aimed to boost industrial growth, while the Agricultural Adjustment Act (AAA) sought to raise farm prices. Measures were introduced to prevent future depressions. This included the creation of the Securities and Exchange Commission (SEC) to regulate the stock market and the Glass-Steagall Act to reform the banking system.

Criticisms from the right were that Conservatives believed the New Deal gave too much power to the federal government, interfering with the free market, and leading to excessive spending and debt. They also felt some of the programs were unconstitutional. Meanwhile, some progressives and radicals felt the New Deal didn't go far enough. They wanted more direct redistribution of wealth and more significant structural changes to the economy. Figures like Huey Long and his "Share Our Wealth" program exemplify this perspective (Roark).

In the 1960s, the Civil Rights Movement began to change from non-violent protests under Martin Luther King to confrontational and if necessary violent resistance under Malcolm X. Blacks began to push back with a newfound sense of pride and voice. The Black Power movement began. The agenda also grew to address multiple social and economic issues. This was a result of frustration with the slow process of equal rights, as well as urban riots—and of course the assassination of prominent black leaders like Malcolm X in 1965 and King in 1968.