THE GREAT DEPRESSION
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The great 1920s that was developed through the age of industrialization, paradoxically ended in a crash of the stock exchange market in 1929 that was subsequently followed by great depression. With the industrial revolution and application of new technologies, there was a boom in the economy during the 1920s that was characterized by increase employment, production of goods in mass and cheap credit that had a large number of consumers. However, at the end of the 20s, there was a market crash in an era that represented change and growth. As a major power that influenced the world and through reflection on the commercial and financial world that ensured united states taking its rightful place. The period of the great depression had many contradictions and paradoxes whereby many people had varying lifestyles as some enjoyed prosperity while the other groups were in absolute poverty. The causes of the stock market crash and the subsequent great depression are derived from the activities that led to the development of the economic boom in the 1920s and the policies set to guide the process hence could be narrowed down to the Red scare, foreign policy and the dollar diplomacy.
The era of 1920s that was also referred to as the aspirin age and roaring twenties has seen economic progress that was rooted in the advancements of technology especially in the manufacturing industry. With the use of power shovels, conveyor belts and even concrete mixers the construction industry was revolutionized. The dial phones and teletype machines helped in the development of the communication industry. This period saw the increase of wages for many Americans to about 11% as well as a shortened length of the workweek. The emergence of consumer society with a bigger middle-class and suburbanization characterized the 1920s which was also referred to the age of managers. The destruction of organized labor orchestrated by the high priest of business-oriented welfare capitalism Andrew Mellon who was the secretary of treasury saw a reduction in the labor unions across the country (Davidson, 486). The red scare was a factor that caused the crash of the market stocks due to the failure of President Wilson to ratify Versailles treaty, joining the league of nations and the progressive achievement of their major goals. Due to the red scare, people were arrested illegally by the Willison administration and tried for the alleged crimes of conspiring with Russian communists’ party to overthrow America (Davidson, 487).
The red scare developed through the rumours that Lenin’s vow to spread communism had reached American shores. The scare was built by the failure of President Wilson’s refusal to ratify the Versailles’s treaty that would comprise the senate republicans and joining of the justice league that utterly destroyed the belief of Americans whereby the declaration of war by Wilson was meant to make the world safe for democracy.
President Wilson’s ideology in foreign policy was decried by the republicans and business class in America who scorned the intervention of the foreign policies by Wilson administration. The investors complained that each and every time the united states intervened in the commercial sector, they lost a lot of money and lives as well. The Wilson administration appointed judges who were conservatives thus did not value the modernity route hence the idea to roll back progressivism. These judges struck to remove the federal child labor laws, limiting the powers of labor unions. They limited the federal regulation of business as well as backed the Andrew Mellon pro-business policy. The administration limited the spending of government with the creation of a general accounting office that reduced tax for the rich passing higher tariffs for business. Agricultural and labors had struggled especially under the administration of Silent Cal whereby employers used various plans and methods to keep out of unions that often-protected interests of the workers. Plans such as the American plan and yellow dog contracts were employed.
The ideology of the dollar diplomacy by President William Howard Taft is in the contemporary is characterized as the substitute of dollars for bullets. The dollar currency dictates sound policy and strategy that legitimize commercial aims through appealing the ideal humanitarian sentiments. Taft policy guided the reorganization of state departments in order to pursue the spirited commercial foreign policy. Taft was of the idea that investments abroad would prompt the remark that dollar diplomacy would supplant the Big stick. The emphasis of the travel salesman concept that Washington would aggressively support and encourage in securing opportunities in foreign countries was the unmistakable point. The design of dollar diplomacy was to prosper both the exploited people and investors in America. The dollar was employed to promote national policies as its investment abroad was protected. Not being a new concept and having been rejected and denounced previously, dollar diplomacy failed as it had attempted to scheme to the usage of the dollar to block ominous penetration in china which drove japan and Russia together weakening the integrity of China.
The application of dollar diplomacy showed the American belief in being involved in the international world affairs. Through emphasis by Taft to protect investments of Americans in new opportunities in foreign land saw the application of dollar diplomacy that advocated for the lending of loans by banks. The policy encouraged American bankers to pump money into sensitive areas such as China and the Caribbean (Davidson, 490). The bankers showed reluctance at first to risk their money whereby United states hoped to play a decisive role in preserving the integrity of china and the open door that required bankers to invest large sums of money, especially in Manchuria. This gambit, however, failed thus weakening the territorial integrity of China. The funding of overseas investment saw an overwhelming loan debt that crashed the stock market followed by depression.Bibliography
Davidson, James West. US: a Narrative History. McGraw-Hill Higher Education, 2014..
