In the end, there was little left of Wilson's proposals for a generous and lasting peace but the League itself -- and the president had to endure the final irony of seeing his own country spurn League membership.

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.

10.The New Deal and World War

10.1 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.
The New Deal brought to the individual citizen a sharp revival of interest in government.
When Roosevelt took the presidential oath, the banking and credit system of the nation was in a state of paralysis. With astonishing rapidity the nation's banks were first closed -- and then reopened only if they were solvent. The administration adopted a policy of moderate currency inflation to start an upward movement in commodity prices and to afford some relief to debtors. New governmental agencies brought generous credit facilities to industry and agriculture. The Federal Deposit Insurance Corporation (FDIC) insured savings-bank deposits up to $5,000, and severe regulations were imposed upon the sale of securities on the stock exchange.

10.2 The Second New Deal
In its early years, the New Deal sponsored a remarkable series of legislative initiatives and achieved significant increases in production and prices -- but it did not bring an end to the Depression. And as the sense of immediate crisis eased, new demands emerged. Businessmen mourned the end of "laissez-faire" and chafed under the regulations of the NIRA. Vocal attacks also mounted from the political left and right as dreamers, schemers and politicians alike emerged with economic panaceas that drew wide audiences of those dissatisfied with the pace of recovery.
In the face of these pressures from left and right, President Roosevelt backed a new set of economic and social measures. Prominent among these were measures to fight poverty, to counter unemployment with work and to provide a social safety net.

10.3 Japan, Pearl Harbor and War
While most Americans anxiously watched the course of the European war, tension mounted in Asia. Taking advantage of an opportunity to improve its strategic position, Japan boldly announced a "new order" in which it would exercise hegemony over all of the Pacific.
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.
On December 8, Congress declared a state of war with Japan; three days later Germany and Italy declared war on the United States. The nation rapidly geared itself for mobilization of its people and its entire industrial capacity.