Throughout the 1930s, the majority of Americans opposed increasing immigration to the United States. In the 1930s, when the Nazis began stripping Jews of their financial holdings prior to allowing them to immigrate, many had trouble passing the rigorous financial qualifications for entry to America. These regulations, forcing potential immigrants to prove they were financially stable and could support themselves indefinitely without getting a job, limited the number of applicants who qualified for immigration visas. They were informed that “any alien wage earner without special means of support coming to the United States during the present period of depression is, therefore, likely to become a public charge,” and should be rejected for an immigration visa. By 1930, unemployment had reached 8.7%, and consular officials were instructed to more rigidly enforce the LPC clause. This clause was designed to exclude any immigrant who lacked the economic means to be self-sufficient and who could potentially become a financial burden on the state. The Great Depression also had a serious impact on an already xenophobic and exclusionary American immigration system.Īs a result of the worsening Depression, President Herbert Hoover instructed the State Department to begin rigorously enforcing a “likely to become a public charge” (LPC) clause from a 1917 immigration law. It had the adverse effect of spurring other governments to enact retaliatory tariffs, decreasing the foreign market for American goods. He signed the protectionist Smoot-Hawley Tariff in June 1930, in an attempt to bolster American agriculture and consumer goods. President Herbert Hoover directed his administration to reduce spending. Individual households were bankrupted as banks and lenders called in outstanding loans. This, in turn, drove down demand for consumer goods and more businesses began to fail. The average citizen, frightened and pessimistic about his or her economic prospects, stopped buying non-essential goods spending dropped by 20% in 1930. By mid-November, the value of the nation's stocks had fallen by 33%.Banks which had lent money to failed investors or businesses simply no longer had the cash on hand to pay their customers. A massive sell-off began, causing the market to lose even more ground and setting off a panic across the country. After some initial stabilization, news of the falling stock prices led lenders to call on investors to repay loans. On Thursday, October 24, 1929, stock prices began to fall on the New York Stock Exchange, losing 11% of their value in a single day. This system worked well, until the stock decreased in value. They assumed the stock price would rise and they would be able to repay the balance of the loan from their investment profits. Many investors, comfortable with debt, bought stocks “on the margin,” using a small personal investment to pay a portion of the actual share value while borrowing the rest from a bank or other lender. Only a small number of Americans purchased stock directly, most believing that the market values would continue to increase. Speculators began to deliberately manipulate stock prices, buying and selling in order to increase their returns. There were few rules to ensure invested money was safe. Factories depended on these consumers continuing to purchase their goods.įinally, the stock market, based on Wall Street in New York City, was loosely regulated. In the 1920s (the “Roaring Twenties”) many American consumers, assuming economic prosperity would continue indefinitely, took on large amounts of personal debt, sometimes at extremely high interest rates. It enacted and raised tariffs in 19 to bolster American industry and keep foreign products out. These purchases left European countries deeply in debt to the United States.Īfter the war, the United States began a period of diplomatic isolation. As the war interrupted existing global trade relationships, the United States stepped in as the main supplier of goods, including weapons and ammunition. American industry had supported the Allied war effort, resulting in a massive influx of cash into the US economy. World War I transformed the United States from a relatively small player on the international stage into a center of global finance.
0 Comments
Leave a Reply. |