In October 1929 the stock market crashed, wiping out 40 percent of the paper values of common stock. Even after the stock market collapse, however, politicians and industry leaders continued to issue optimistic predictions for the nation's economy. But the Depression deepened, confidence evaporated and many lost their life savings. By 1933 the value of stock on the New York Stock Exchange was less than a fifth of what it had been at its peak in 1929. Business houses closed their doors, factories shut down and banks failed. Farm income fell some 50 percent. By 1932 approximately one out of every four Americans was unemployed.

Roosevelt and the New Deal

In 1933 the new president, Franklin Roosevelt, brought an air of confidence and optimism that quickly rallied the people to the banner of his program, known as the New Deal. "The only thing we have to fear is fear itself," the president declared in his inaugural address to the nation.

In a certain sense, it is fair to say that the New Deal merely introduced types of social and economic reform familiar to many Europeans for more than a generation. Moreover, the New Deal represented the culmination of a long-range trend toward abandonment of "laissez-faire" capitalism, going back to the regulation of the railroads in the 1880s, and the flood of state and national reform legislation introduced in the Progressive era of Theodore Roosevelt and Woodrow Wilson.


By 1933 millions of Americans were out of work. Bread lines were a common sight in most cities. Hundreds of thousands roamed the country in search of food, work and shelter. "Brother, can you spare a dime?" went the refrain of a popular song.

An early step for the unemployed came in the form of the Civilian Conservation Corps (CCC), a program enacted by Congress to bring relief to young men between 18 and 25 years of age. Run in semi-military style, the CCC enrolled jobless young men in work camps across the country for about $30 per month. About 2 million young men took part during the decade. They participated in a variety of conservation projects: planting trees to combat soil erosion and maintain national forests; eliminating stream pollution; creating fish, game and bird sanctuaries; and conserving coal, petroleum, shale, gas, sodium and helium deposits.

But the New Deal's cornerstone, according to Roosevelt, was the Social Security Act of 1935. Social Security created a system of insurance for the aged, unemployed and disabled based on employer and employee contributions. Many other industrialized nations had already enacted such programs, but calls for such an initiative in the United States by the Progressives in the early 1900s had gone unheeded. Although conservatives complained that the Social Security system went against American traditions, it was actually relatively conservative. Social Security was funded in large part by taxes on the earnings of current workers, with a single fixed rate for all regardless of income. To Roosevelt, these limitations on the programs were compromises to ensure passage. Although its origins were initially quite modest, Social Security today is one of the largest domestic programs administered by the U.S. government.

General Hideki Tojo became prime minister of Japan in October 1941. In mid-November, he sent a special envoy to the United States to meet with Secretary of State Cordell Hull. Among other things, Japan demanded that the U.S. release Japanese assets and stop U.S. naval expansion in the Pacific. Hull countered with a proposal for Japanese withdrawal from China and Indochina in exchange for the freeing of the frozen assets. The Japanese asked for two weeks to study the proposal, but on December 1 rejected it. On December 6, Franklin Roosevelt appealed directly to the Japanese emperor, Hirohito. On the morning of December 7, however, Japanese carrier-based planes attacked the U.S. Pacific fleet at Pearl Harbor, Hawaii, in a devastating, surprise attack. Nineteen ships, including five battleships, and about 150 U.S. planes were destroyed; more than 2,300 soldiers, sailors and civilians were killed. Only one fact favored the Americans that day: the U.S. aircraft carriers that would play such a critical role in the ensuing naval war in the Pacific were at sea and not anchored at Pearl Harbor.

As the details of the Japanese raids upon Hawaii, Midway, Wake and Guam blared from American radios, incredulity turned to anger at what President Roosevelt called "a day that will live in infamy." On December 8, Congress declared a state of war with Japan; three days later Germany and Italy declared war on the United States.

<img src="http://i89.photobucket.com/albums/k234/TheAdmiral_2006/TheBoat/RAILS1.jpg">