Read this article to learn about the status of ‘USA’ during two World Wars!

The Treaty of Versailles, in the formulation of which the US president, Woodrow Wilson, had played a leading role, was rejected by the US Senate.

USA refused to join the League of Nations, which had largely been the creation of Wilson.

In the elections held in 1920 for the offices of the president and the vice-president, the candidates of the Democratic Party, to which Wilson belonged, were defeated by the Republican Party. The candidates of the latter party also won two more successive elections held in 1924 and 1928.

World War 2 For Dummies | Khalid A. Joharji's Blog

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Economic Misery despite Economic Growth:


The immediate post-war years in USA were years of a serious economic crisis. During the war, while the European economies suffered serious damages, the US economy expanded. No battle was fought on US soil and thus her cities, industries and farms did not face any damages. With the end of the war, the economic expansion which was the result of the war, suddenly ceased, creating a serious economic crisis.

About 100,000 businesses were reduced to bankruptcy and about five million people lost their jobs. The resulting labour unrest led to industrial strikes. In 1919 there were over 3,500 strikes, some of them involving hundreds of thousands of workers and lasting for many months.

The strikes were put down with a heavy hand, and attempts were made to create a scare of a revolutionary outbreak like the one that had occurred in Russia. Within a short time the US economy recovered with unprecedented growth. During this period, when the rest of the capitalist world was recovering from the ravages of the war, USA began her industrial expansion based on major advances in science and technology.


She had emerged as the main creditor nation of the world, and most European countries were her debtors. An indication of the tremendous industrial expansion may be seen in the fact that in 1929, more than five million cars were sold in USA.

This industrial expansion was accompanied by a further concentration of economic power. Thousands of small companies were swallowed up by the few big ones. Competition between different manufacturers, which had been a characteristic feature of capitalist economies, almost ended.

In some cases, such as steel, almost the entire industry in the country was in the hands of one company. These companies exerted enormous influence on the government and enjoyed special privileges. It used to be said that what was good for General Motors, the chief manufacturer of cars, was good for America. The concentration of economic power in few hands led to increased corruption and there were many scandals involving politicians and top levels bureaucracy.

The unprecedented economic growth, however, brought little benefits to the workers, most of who continued to lead lives of poverty and misery. Besides low wages, there was the ever-present danger of being thrown out of employment.


A strong trade union movement also could not emerge due to the connivance between the companies, government officials and law courts. The capitalists often resorted to violence against the workers with the help of the police and hired gangs.

The Crash of 1929:

The unprecedented expansion of the US economy came to an end with an unprecedented catastrophe. Early in 1929, President Herbert Hoover declared, “[o]urs is a land rich in resources, stimulating in its glorious beauty, filled with millions of happy homes, blessed with comfort and opportunity”.

The future of the country, he added, was “bright with hope”. Within a few months after this comment, on 24 October 1929, the crash happened, which in history has come to be known as the Great Depression. The basic cause of the economic crisis lay in the nature of the US economy which went on expanding, while keeping the bulk of the populace impoverished. The tremendous increase in production facilitated by advances in technology and increasing profits created sharp divisions between the haves and the have-nots.

This created a situation in which there were not many people who had the means to buy what was being produced. Between five and seven per cent of the non-agricultural population had been unemployed throughout the 1920s.

In spite of almost a decade of unprecedented economic growth, “more than half the families in America lived on the edge of or below the minimum subsistence level”. It has been estimated that, in 1929, about a third of all personal income went to just five per cent of the population. This “fundamental misdistribution of purchasing power” has been regarded as a major factor leading to the crash, even by those who were by no means critics of the capitalist system of economy.

The crash began when the prices of shares began to fall, creating a panic, and people rushed to sell their shares, which led to a further fall in the prices of shares. This led to the collapse of the stock market. This was followed by the failure of banks—between 1929 and 1932, over 5,700 banks failed and another 3,500 ceased their operations. The failure of banks wiped off the life’s savings of millions of Americans.

This meant that the buying capacity of the people further went down, as even those fewer people who earlier had the money to buy goods were now penniless. The industries could not get loans from the banks, and the goods they produced could not be sold, and so they began to close down.

This meant that more people lost their jobs and the demand for goods further went down leading to the closure of more factories. The number of the unemployed rose from 1.5 million in 1929 to five million in 1930, to nine million in 1931 and to 13 million in 1932— the figure of 1932 being over 25 per cent of the total US workforce. The condition of farmers was no better than that of urban workers. The prices of agricultural produce fell, and millions of farmers lost their lands and were reduced to the position of destitute.

Racial Discrimination:

The 1930s were a terrible period for the American people. The worst affected were the Black people. Over 200,000 had served as soldiers in Europe during the war and on their return home they found that racial discrimination against them had further worsened.

Even the war veterans were victims of humiliation, indignities and lynching. They were the first to be thrown out of employment and often their jobs were taken over by Whites. The right to vote continued to be denied to them. Racial segregation and discrimination had spread throughout the country and was no longer limited to the southern states. White terrorist gangs such as the Ku Klux Klan were active in many parts of the country.

The victims of their violence now included, besides the Black people, Jews, foreigners, and other groups regarded as “racially impure”. During the Great Depression, the condition of the Black people further worsened.

White racists demanded that no jobs should be given to ‘niggers’ until every White man was employed. Hundreds of thousands of them migrated from the southern states to the north but there, too, conditions were no better. It has been estimated that, in 1932, about one-third of the Black population was unemployed besides another one-third was underemployed.

The 1930s witnessed the growth of radicalism in US society. A strong trade union movement began to emerge. There were radical political movements advocating socialism. The Communist Party of USA which had been formed earlier grew in strength and played an important role in organising the workers, Blacks and Whites alike; and fighting against racism. The Black people also organised themselves to fight back racism.

The National Association for the Advancement of Colored People (NAACP) played an important role in the fight against racism and in uniting the Black and the White workers. Two cases of blatant injustice rocked USA during this period and aroused protests by people in many other countries. The first case concerned two Italian immigrants, Sacco and Vanzetti, who were arrested on the charge of committing a murder.

The evidence against them was considered “at best questionable”. They were sentenced to death. It was generally believed in USA and elsewhere that they were innocent and had been framed in a false case to add to the scare that USA was in danger of a revolution by subversive elements.

There was a worldwide demand for a retrial of the case but it was refused and Sacco and Vanzetti were executed. The second, known as the Scottsboro Case, was a case of racism. In 1931 nine young Black boys were tried in Alabama on the charge of raping two White prostitutes. Eight of them were sentenced to death by a jury consisting entirely of Whites.

The case was generally considered to be completely fabricated and a nation-wide campaign, supported by world opinion, was launched for the defence of the boys who had been convicted. In this case, the executions were not carried out though most of the boys languished in prison for many years.

The New Deal:

The Great Depression, which had its origin in USA, has been described as “the largest earthquake ever to be measured on the economic historian’s Richter scale”. It affected almost all countries of Europe and, to some extent, almost every country in the world.

Its effects on Europe were extremely grave, and would be mentioned subsequently. In USA, some of the worst effects of the economic crisis began to be remedied after 1933. This happened during the presidency of Franklin D. Roosevelt, who was first elected in 1932 and won three subsequent elections. The programme of reform which he started is known as the New Deal.

A large programme of welfare was initiated, which alleviated the misery of many sections of the population, though the effects of the Great Depression continued right up to the US entry into the Second World War. Though Roosevelt was generally believed to be sympathetic to Blacks, little was actually done to improve their lot.

USA and the World:

The US refusal to join the League of Nations was a big blow to that organisation. The main preoccupation of USA during the period was the expansion of her economic control over the rest of the world. The growing US domination of the world economy had serious consequences for Europe and the rest of the world. USA supplied vast amounts of credits to Germany and some other countries in the 1920s, which helped in the economic recovery of Europe but the increased dependence on USA had disastrous consequences for these countries as was to happen during the Great Depression.

She was initially concerned at the growing Japanese ambitions in China as it could harm the US economic interests. In 1922, a treaty was signed between USA, Japan, Britain, France and Italy, which aimed at ensuring an Open Door policy in China so that no one country established her exclusive control over China.

The treaty also imposed some restrictions on Japan’s naval strength but left her as the greatest naval power in the Pacific. Like other Western countries, USA refused to be involved in any efforts to curb the acts of aggression started by Japan in 1931 and later by Italy and Germany. For sixteen years, she refused to recognise the government of USSR (similarly it took her over twenty years to recognise the government of China).

In Latin America, the US economic domination was further strengthened, and direct military intervention continued until the time when Franklin Roosevelt became president. The US domination of Latin America—or “Yankee Imperialism”, as the Latin Americans called it—caused widespread resentment there.