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The Impacts of World War II in America

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The Great Depression

The Great Depression was the deepest and the longest economic slump in the western world. It happened in the decade prior to World War Two. It originated in the United States in 1929 when the stock market crashed and billions of investment vanished. This led to a further demise of many banks after depositors withdrew their money in a state of panic. It is said to be the greatest inflation in the twentieth century. It bought about poverty and unemployment and sharp decrease in production around the world. In Europe, it is believed to have pushed countries like Germany into war after their democratic leaders were overthrown by fascists who came into power riding on the wave of disillusionment occasioned by the Great Depression.  

Problems that led to the Great Depression

  • The stock market crash of 1929

This is alleged to be one of the major causes of the great depression. On October 29, 1929, a day labeled ‘Black Tuesday’; stock prices in the Wall Street in New York plummeted to all new lows. Stock holders lost more than forty billion dollars by the end of the stock decline period. This led to many Americans to cut their spending leading to loss of jobs, especially in the industrial cities.

  • The collapse of banks

After the stock market crash of 1929, many investors started shying away from investments; therefore it meant less borrowing hence denying the banking sector a main source of income. The banks started recalling loans in earnest hence many people who had saved with the banks started withdrawing their savings. With this turn of events, banks lacked money to stay afloat hence leading to a wave of bank failures. In the early 1930’s, more than seven hundred U.S banks collapsed although the federal government tried to save some.

  • The global economic downturn

After the end of the First World War, many European countries were experiencing severe depression with regards to losses incurred during the war. In order for these countries to rebuild, they had borrowed heavily from the United States. Therefore the economic stature of the United States was strongly connected to that of the rest of the world. When the United States started experiencing depression, it started recalling its loans from abroad. The European borrowers were unable to return these loans hence the world experienced a sharp decline in economic fortunes.

  • The decline of purchases across the board

With the increasing fear of further economic affliction, populace from all classes of life stopped buying items. This led to a pile up of unused goods leading to a decline in levels of production in various industries. Many of these industries closed down therefore many workers lost their jobs. People who had borrowed loans were unable to repay them and their belongings were repossessed, leading to even less spending and consequently more job losses. The rate of unemployment rose to above 25% in the United States.

  • Deflation

When production began to fall, prices all spiraled down. This led to;-

  • Increased difficulty in meeting past debt obligations, which led to foreclosures and further panic.
  • Encouraged people to hold on to their cash therefore less spending (called by Keynes the paradox of thrift)
  • A decline in the prices of assets
  • A fall in industry profits
  • Fear and loss of confidence in investments
  • Distress selling whereby people disposed their assets before they depreciated

§  Inequality in wealth and income

Another cause of the depression advanced by two economists William Foster and Waddill Catchings was inequalities of wealth and earnings in the 1920’s. They argued that a lot of goods were produced during that period but then many people could not afford these goods. Most of the proceeds from this increased production went to profits and eventually to the stock markets instead of the increase of wages. An increase in wages could have meant greater spending therefore decrease in income disparities.

Steps Franklin D. Roosevelt Took to End the Depression

During the years after the 1929 Stock crash, the Republican Herbert Hoover administration tried to reassure the nation that the depression would run its cause. It adopted a non interventionist’s stance in dealing with this turn of events. However, the situation failed to improve and unemployment rose to unprecedented levels. In the 1932 elections, the Hoover administration was bundled out of office and the Democrat Franklin D. Roosevelt became the president on a wave of great hope and overwhelming majority votes. He set about to turn things around by taking action such as;

  1. The close of all banks in the United States (called the ‘bank holiday’)

After Franklin D. Roosevelt was inaugurated into office (on march, 4 1933),  he ordered all banks to close for four days, during which time the congress would pass legislation and determine which banks would reopen after this period. This move is viewed to have calmed the situation and stopped the bank runs for a while but in the long run it didn’t stop the runaway pessimism in saving and investing with the banks.

  1. The beginning of ‘fireside chats’

President Franklin D. Roosevelt started radio talks to directly address the nation (branded ‘fireside chats’) in order to calm people’s nerves and therefore dissuade further bank runs and other distress decisions such as money hoarding. This appeased the citizenry and brought about sanity and the economy outlook improved. Despite this short term measure, the economy further suffered depression in the following years until 1938. 

  1. The enactment of legislation

The Roosevelt administration passed legislation to stabilize production (both in industry and agriculture), create employment and initiate recovery. This was dubbed ‘the new deal’ by the Roosevelt administration. Institutions and Programs were formed to support the recovery process.  Among the major ones were;-

-The Works Project Administration, which employed millions of Americans during and after depression

-The Tennessee Valley Authority (TVA), which undertook large construction of dams and hydroelectric schemes. These helped control flooding and provided water and electricity in the south.

In a bid to streamline the financial system, the Securities Exchange Commission (SEC) was formed to act as a stock market regulator and the Federal Deposit Insurance Corporation (FDIC) was formed to protect depositors’ assets.

The Social Security Act

Prior to the depression, the United States didn’t have any form of social security Program. In 1935, the congress passed the Social Security Act which established a system that provided old-age pensions for workers, survivor’s benefits for victims of industrial accidents, unemployment insurance, and aid for defendant mothers and children, the blind and physically disabled. The positives of this act are that it helped Americans to feel more secure.

The successes of the New Deal and its Legacies

Although the new deal programs helped spur an economic recovery in the short term, all the effort is said to have been reversed by the sharp recession of 1937. Overall, the new deal gave faith and hope to the Americans, in that there government cared for once. The Hoover administration was accused to have left the populace, especially the poor, to their own devices. The Roosevelt administration was seen to confront the inflation.

Otherwise, the New Deal changes did not alleviate unemployment nor did it eliminate poverty. It was seen to have just promoted socialism principles of the day. Its legacies were the advent of the national Social Security program and the increased control of the economy by the federal government through State organs such as the Federal Reserve and The Security Exchange Commission. The real economic reprieve came in 1938 at the start of World War Two, where the United States adopted a state of preparedness and many industries were revived to start armament production.


By the end of the First World War, the United States had poised itself to take over the mantle as the world’s next economic power. The great depression followed in the late 1920’s delivering a severe blow to the world’s economies. Devastated by this turns of events, many European governments turned to dictatorships in order to gain back control, notably Germany and Italy. This is what is believed to have spurred the start of the Second World War. America was not keen on engaging in World War II. The event that changed that was the attack by the Japanese on Pearl Harbor. In 1939, President Roosevelt stopped the trade of iron and gasoline with Japan and all their assets in the United States were frozen. The Japanese did not take it well especially because they needed it for their war against china. In 1941, they attacked Pearl Harbor killing over 2000 people and severely damaging several battleships.

Impacts of World War II in America

Despite the America being reluctant to participate in World War II, the war had several impacts to America. Below are some of the positive impacts of World War II era in America and the transformations made during this period.

At the start of world war two, the European countries were the ones which fought between each other. It was of the opinion of many Americans that this was a European war, so the United States decided to stay out of it. It instead decided to adopt a state of preparedness in case of an attack on its mainland. Then came the Japanese attack on Pearl Harbor in 1941. The United States realized it could no longer adopt an observer’s stance. Therefore plans were initiated to enter the war. Initial plans were to go it alone. But then policy makers realized that for the war to be won, an alliance would have to be formed since the greater enemy, which was Germany, was in Europe. It was also easier to form an alliance with France and Britain because of shared ideals like democracy and past historical ties. An alliance would also be more effective due to economies of scale. The United States would also gain a vast market for its military industrial production. It provided money, food, petroleum, technology and (in the latter stages of the war) soldiers.  It was ‘the great arsenal of democracy’ to the allied powers, as described by Roosevelt. The allied powers also consisted of the Soviet Union and China, because of the common goal to destroy Nazism, although this two had other agendas of their own, to expand communism. Through this alliance, the allies saw the need for international cooperation, to avert future conflicts of this scale, hence the United Nations was formed after the end of the war, to promote and maintain world peace.

The United States physical infrastructure was not directly affected during world war two, since the battleground was in Europe. This ensured the industrial complex remained intact therefore the United States gained the status of the chief supplier of armaments and other war support products to the alliance and thereafter the financier of the reconstruction of western Europe after the war. Hence its economic status grew in leaps and bounds. Unemployment was eliminated and standards of living rose sharply. It can be safely concluded that the United States was the biggest economic beneficiary of world war two.

Another impact of World War II was the adoption of dollar as the international currency. The United State's dollars become an international currency after WWII. This was due to the demise of the other major world currencies after the collapse of the European economies. The formation of the International Monetary Fund further set the United States as the chief custodian of the world’s finance.

Also, the United States’ economy gained a lot of human capital. Top scholars like scientists, economists and talented people like Einstein and others mainly from Europe migrated to the United States. This migration had started in the early 1930’s after many European governments became totalitarian in nature. The immigrants were escaping political persecution. They brought with them a lot of expertise and knowledge. This helped spur an industrial revolution. It culminated in the formation of the ‘Manhattan project’ which came up with the atomic bomb. Such technological advancements helped bring the war to a quick end. Notable immigrants were the Jews escaping Nazi Germany. Jews are good in finance and business and they played a major role in economic expansion. They still played a major role today. Rich Jews also financed the war effort. 

Due to increased economic effort and the expanded economy, labor wages improved leading to improved standards of living. Sectors of the economy like real estate grew tremendously because of new found wealth. Returning war veterans bought houses with the help of policies put in place by the federal government for former servicemen. Labor unions gained a lot of clout since many labor barriers were lowered in order to satisfy labor needs. Women started working in large industrial chains and participated in making aircraft, weapons and other previously ‘manly’ jobs. In the armed forces, women were enlisted in the Women’s Corps. Minority groups such as blacks and Latinos were employed in large numbers in factories and worked along with the whites. However, this arrangement sometimes aroused racial tensions, leading to race riots in overcrowded cities such as Chicago, Harlem and Detroit. Regardless of this setback, this arrangement set a basis for future racial tolerance and integration.

The World War II also led to the expansion of employment in America. After the commencement of the state of war preparedness programs, previous high unemployment rates occasioned by the great depression vanished. Labor surplus became labor shortage in a span of less than three years. Groups which were previously locked out of the labor market like housewives and minorities found themselves in huge demand. This phenomenon led to abandonment of peasant farming as many farmers migrated to cities to take up industrial jobs or enlisted for military service. It led to rapid urbanization, which spurred an industrial and technological revolution

In addition, the World War II also led to the American mainland experiencing a lot of internal population shifts. This phenomenon occurred mainly due to labor needs realignment. Before the war, north United States was mainly preoccupied with production and finance industries while the south was predominantly occupied with agricultural production. After the start of world war two, and commencement of war preparedness programs, many southerners moved into the northern cities to satisfy increased labor requirements. The northern cities became very congested and house rents very expensive. This also led to culture shifts, especially to southerners because they would now have to work along with blacks. Another population shift was implemented by the federal government, which decided to intern Americans of Japanese descent, when it started an offensive against Japan. This arose out of the belief that the American-Japanese may provide covert information to the imperial Japan army, therefore compromising the homeland security.  Many historians claim that these were just unfounded fears. The American-Japanese population was interned in concentration camps often in areas with harsh climates. After the war, many of them decided to go back to Japan. Americans of Italian and German origin living in the American coastal cities were also asked to relocate to the interior, although they were not interned like the Japanese.

Impact of World War II on America’s Domestic Front

Arsenal of Democracy

Arsenal of Democracy was a slogan made famous by President Roosevelt on December 29, 1940 through radio. It originated from Robert Emmet Sherwood who was quoted in the New York Times May 12, 1940 as saying "this country is already, in effect, an arsenal for the democratic Allies." At the time, Germany who had allied with Japan and Italy had occupied much of Europe and was threatening to take over Britain. That day Roosevelt promised the United Kingdom that it would help by giving military supplies, the United States was to stay out of the actual battle.

President Roosevelt called Detroit Michigan ‘the great Arsenal of Democracy’as the automotive industry which produced armaments during World War II was flourishing. He asked the American to become "the great arsenal of democracy". He gave a speech that that showed the Americans the situation they were would not favor them if the axis powers won. 

The speech signified Americas likelihood of entry to World War II despite its inter war United states policy. In the period of 1940-1944, they supplied over $50 billion worth of war materiel to the United Kingdom and its supporters.

Impact of the war on business and the federal government,

One of the major effects of the war is that it ended the great depression. The great depression started in 1929 and progressed all through during World War 2. It had negatively affected many economies throughout the world. In the United States, 11.5 million Americans were unemployed. President Roosevelt had introduced some economic measures labeled ‘the new deal’ meant to steady the economy but these measures only managed to slightly improve the economy. Before the war, the national government was not very influential in its citizen’s economic and social lives. But due to the war effort, the federal government became a major influence in the general populace. The war effort united the people behind their government. It was therefore easier for the government to implement major projects. Of note in this period is that the government was able to increase its tax base from 4 million to 43 million during the period between 1939 and 1945. Although this was less than a half of what was needed to cover the world effort, it was a very significant step towards economic advancement. in order to cover the deficit, the government introduced the war bonds. Americans bought these bonds to the tune of 185 billion dollars, more than what was necessary. The treasury department was also able to contain inflation to very low levels (an average of 3.5%) during the war period. The rate of unemployment decreased sharply during the years between 1941 and 1945. Even women who would have otherwise not have worked gained jobs. This was due to increased defense spending on civilian and military programs. To balance the civilian and military needs during the war, president Roosevelt formed the war production board and the office of war mobilization headed by both civilian leaders (mainly company executives) and military leaders. Although there was a lot of internal wrangling, these agencies managed to successfully coordinate the war effort without hurting the economy.

Industrial concerns were fully directed to the production of armaments and other war related products such as food, vehicles and textiles. This positioned the United States strategically as a major world producer. The dollar strengthened against other world currencies and by the end of the war it was the world currency. During that time, many scientists immigrated to the United States. Many industrial developments and inventions were made during that time in a bid to support the wartime effort. Folks from the countryside relocated to the cities in order to satisfy the labor needs occasioned by the heightened war production and also to replace positions left by laborers who had enlisted in the war. Industries such as car manufacturers started producing airplanes and weapons. Labor unions grew both in power and stature.

There was major migration to big industrial towns. Men who had been drafted and were working in some of the industries had to be replaced by people from rural areas. They moved in order to provide labor in these industries which were very essential at the time.

Most of the African Americans moved from the agricultural field in the south to the large cities. This brought about racial tensions. There were disagreements about jobs and cities feared race riots would happen and cause major damage. Although the riots did happen, they were not as major and damaging as was feared.

Impact of World War II on America’s Agricultural Sector

There was major labor shortage in the agriculture sector. A number of workers had been drafted and most of the remaining opted to move to the city and work in the industries. This created a lot of pressure as most agricultural products were in demand especially by the military.  Germany prisoners of war were used to work on the farms and food processing industries.

Civil Rights during the World War II

Because of increased labor requirements, large migrations of black communities from the southern states went to work in big cities such as Chicago. As they integrated with the predominantly white communities, a lot of race related confrontations took place. The white population which had also immigrated from the south found it hard to work alongside the blacks. This led to rise of civil rights organizations. The black civil rights groups formed a ‘V’ campaign, of both campaigning for equality rights at home and fighting for country abroad.

The Japanese-American Internment

After the attack on Pearl Harbor, the citizens of the United States expressed their disgust of the Japanese Government by mistreating the Japanese Americans who did not have anything to do with the attack. Harassment and hate crimes were on the rise. Japanese Americans remained loyal to their ancestral land. People did not trust them as they were feared to be a security risk. They would be suspected as being spies for the Japanese government. Fear and bad advice led President Roosevelt to sign an order in February 1942 that all Japanese to be relocated to concentration camps in the middle of United States. Many sold their businesses, homes and other valuables because they did not trust their property would still be there when they returned.

Most of these Japanese Americans had never been to Japan but this did not make a difference. Even those who were veterans of the World War 1 were forced to leave their homes. They were held in camps in the remote areas of western America where the housing consisted mainly of tarpaper barracks. Dinning was done in mess halls and children were to attend school while adults had an option of working for a salary of $5 per day. Cultivation on the arid soil where the camps were located was not successful so the Japanese American had to rely on food from the American government.

Life in the camps was very challenging it was too hot in summer and too cold in winter. There were recreation activities to pass time in the relocation centers but it was far from comforting. There was no escape route as if anyone tried to flee the camps; they would be shot instantly by the armed sentries who kept guard. They elected representatives who were to air their grievances to the government but it often failed.

Fred korematsu went to court challenging the order by President Roosevelt to no avail. The Supreme Court ruled that the order was a wartime necessity. Negativity toward the Japanese in America was all over and even after the order was appealed, many could not go back  to their homes . In 1988, the United States government tried to apologize by awarding the surviving interns a sum of $20,000.

Impact of World War II on Women in the Industrial workplace

The war brought about significant changes on the role of women in the society. Before the war, it was customary that the men were the ones that went to work. During the war, many former laborers enlisted to be servicemen. This left a huge labour gap in many industrial cities.  The industrial production had to be maintained and even president Roosevelt urged that it was important for people to support the war in any way they could. He said that this was a contribution to winning the war as the soldiers that were at war. Only a quarter of American women worked before the year 1941. This call to action opened many working opportunities to women and other minority groups who would otherwise not have worked during

Many women went to work during the war and when it ended, some of them were replaced by the veterans. Those who wanted to continue working did so. Women gained more respect as they proved they could work outside and still keep the home running. They asked for equal pay and this made impact on the workforce. The next generation and the ones after that of women also worked as they found it was common to do so

In conclusion, World War II was an event with an outcome that moved us towards a better nation. The United States economy reached tremendous and unduplicated growth rates. This course of events positioned the United States as the world’s economic, industrial and military super power.  The war can be said to have changed the United States course of history forever. 

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