The Depression Case
Essay Preview: The Depression Case
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After World War I, the United States was the worlds leading economic power. However, many European countries were left with the devastation of human losses and the economic costs of war. In a position of wealth, the United States loaned money to its European allies in order the help the rebuilding effort, believing these loans would be repaid from the wealth generated by these investments and the reparations that Germany would pay. This, along with an extreme surplus in wealth generated by the postwar boom that was being invested into the stock market, artificially inflating prices, put the United States in a precarious position as wealthy individuals felt a false confidence that this rapid expansion would continue forever (1,3).
This extreme rise in wealth, spending, and investments led the U.S. economy into a depression. This was only worsened by the crash of the New York Stock Exchange in 1929, which caused the average price of stocks to fall to one-fifth of their original values in very short periods of time (3). This led to a rapid decrease in investments not just in the U.S., but also our investments in European countries. With no more money being given to them, these countries themselves slipped into depressions and were unable to pay back U.S. loans (2). The effects of our own economic collapse were being felt around the world.
Over a quarter of all U.S. citizens were left unemployed as banks closed and businesses went bankrupt. Those in agriculture have been fairing poorly even before the depression. Many farmers had borrowed money in order to mechanize, modernize, and increase their productivity, but with the plummeting prices in crops many were unable to repay loans. Those that faced these unfortunate circumstances were foreclosed and left homeless (1).
These effects can be related to the situation of many in To Kill a Mockingbird by Harper Lee. Many of those in the novel, such as the Cunninghams, are dealing with the hardships resulting from the depression. The Cunninghams are a farming family in the story, and are dealing with the problem of prices for their crop being too low. They also find themselves in an entailment, meaning that he is not the clear owner of the inherited property and can neither sell nor mortgage it to raise money. One effect of this is seen when Mr. Cunningham goes to see Atticus about his entailment problem, and is worried about paying him for his service. As the year goes