The Progression of Poverty in America

Poverty in America has changed from the time of Reconstruction to the 1930s and is ever changing in American society. There was a shift in wealth from the South to the North during Reconstruction, followed by an almost destitute country around the time of the First World War. Then, even after the economic boom in the 1920’s, the country still found itself in struggling financially after the Great Depression. The reasons poverty changed were due to the outcome of the Civil War, the corruption of the Gilded Age that required government intervention, and the overconsumption and overspending of the 1920’s that was one of the factors leading to the Great Depression.

To begin, the Civil War caused a change and shift in the wealth in the United States. The South had been a large part of the United States’ economy with their agriculture focus and especially cotton crops. Southern plantation owners had enjoyed luxury and riches, until the loss of the Civil War. After the North’s victory, “northern wealth grew by 50%, while southern wealth dropped by 60%.” (Shi & Tindall 703). The war had greatly impacted the men who fought for the Confederacy. In Henry Grady’s speech “The New South,” contained in our Course Reader, when the confederate soldiers came home, they did not find what they expected, instead “the soldier finds his house in ruins, his farm devastated, slaves free, stock killed, barn empty, his trade destroyed, his money worthless” (Course Reader, p 88). The south had a difficult pill to swallow when they got home. The plantations and the financial security they had enjoyed before the war was no more and their slaves were freed.

The freed slaves is one of the things we now celebrate about the Union Army’s victory, but “the Emancipation had eliminated $4 billion invested in slaves” (Shi & Tindall 704). “The old south rested everything on slavery and agriculture” (Course Reader, p. 89) and now many of the things that had made the South so rich were gone now and “southerners were homeless and hungry because of the Civil War” (Shi & Tindall 704). “Before the war, the South had generated 30% of the nation’s wealth, but that shifted because only ten years later, it produced only 12%” (Shi & Tindall 704). Then, between 1890-1920, condition of the poor again was noticeable in American history. The reason that poverty was brought to the forefront during this time was because many felt that America was suffering because of the urban-industrial revolution (Shi & Tindall 937). An example of the urban-industrial revolution issue was the Pullman Strike. The Pullman Company built a company town.

The company owned the houses and stores in the town. That company basically required the people that they hired to live in the company town and even made them worship in the churches that the company favored These companies would buy products for low prices and then basically price gouge their workers by raising the prices. The people working for this company and living in this town were pretty much held by the company. All of the money they earned went right back into the company’s pocket. This really wasn’t fair and it lead to the Pullman Strikes. (Levine, Lecture) Only the really rich could do this, but it would take the government to step in and change the way that companies treated their employees. One of the reasons for their concern was “widespread inner-city poverty”(Shi & Tindall 937).

The poverty at this time even caused the government to step in and take a larger role in what was happening in the economy. One of the major problems was the “widening gap between rich and poor during the Gilded Age (Shi & Tindall 938). There were so many things happening during this time that made poverty a huge concern. “The nation’s worst economic calamity to that point brought massive layoffs; nearly a quarter of the adults in the workforce lost their jobs and there was about 10 million Americans living in poverty with annual incomes barely adequate to provide the minimum necessities in life” (Shi & Tindall 939). People had enough and those that could tried to take a stand against poverty and other conditions of the time. The Progressives tried to stop some of the companies that had gotten too powerful and fought for those “in economic distress on small farms and in big cities” continuing to fight again those businesses that were only wanted to make a profit (Shi & Tindall 947).

People started to want help from the government. The country at that time had a huge gap between the rich and the poor. That divide still exists today. During that time, they tried to “address the issue of economic inequality by trying to redistribute the wealth by using a federal income tax”(Shi & Tindall 955). Soon after when Roosevelt was elected and he decided to help. “Roosevelt declared it was time to deal with the “grave evils” that was happening because of huge corporations exercising dominance over their industries and the nation’s economic life (Shi & Tindall 957). Finally, the government decided to step in and there was no more of the “notion that government had no role in protecting the public welfare by regulating the economy” (Shi & Tindall 982). From then on, the government helped protect citizens from those who would take too much power and tried to use their position or power to move the economy in a way that would suit their best interest, whether it was a company or a politician.

Another really memorable time in American history that poverty was brought to the forefront was the when the stock market crashed and caused the Great Depression. Prior to the Great Depression, the South was still the poorest area of our nation (Shi & Tindall 1031). Most of the farmers still did not have back what they had lost during the Civil War. Still the economy of the whole nation was doing great. The economy of the United States had really boomed and our country’s economy was soaring (Tindall 1031). There was no shortage of jobs during that time and workers were paid well. Because of the growing economy and things looking up people started not to worry about saving and just started spending and buying more things on credit. Business started trying to help people buy more things on credit and “by 1929 almost 60% of purchases were made on the installment plan (Shi & Tindall 1032).” The wild spending of this time led to people putting more money in the stock market and the crash made poverty run rampant again. The economy collapsed because people had overspent for so long and really could not buy more products, but companies were still producing the products and ti just got to be too much.

On top of that, many businesses did not increase workers’ wages (Shi & Tindall 1095). “From 1929 to 1933, the Gross Domestic Product had dropped almost 27% and ¼ of the workforce was out of work” (Shi & Tindall 1095). It took the government stepping in with Roosevelt’s New Deal and his Second New Deal to turn things around. In conclusion, poverty has always been a blemish on American society. Between the Reconstruction Era to the Great Depression, America has struggled with how to resolve this problem. The way poverty appeared changed because of the effects of the Civil War on the South, the corrupt business practices of the Gilded Age, and the overindulgence of the 1920’s where they bought more products than they could afford and racked up debt on credit, leading to the Great Depression. In each picture of poverty, we see the government’s attempt to step in and make it better, but the difference between the rich and poor will continue to widen.