The Northeast

States: Pennsylvania, New York, New Jersey…

It’s the oldest region & varies from the largest city (NY) to the smallest state (Rhode Island). The area is rich in history, culture, economic opportunities. It’s a small region in the northeast corner of the country known for picturesque rural villages, numerous fishing harbors. The landscape varies from the rocky coast of New England to the fertile farmland of the Chio River Valley.

The mouths of 3 major rivers (Delaware, Hudson, Connecticut River), emptying into the Atlantic, pierce its coastline. The Niagara Falls is also here.

There’re 11 states in the Northeast. Of those, 6 are known together as the New England States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, & Vermont. The other 5 states are known as the Middle Atlantic States: Delaware, Maryland, New York, New Jersey, & Pennsylvania. The nation’s capital – Washington, D.C. – is also part of the Northeast.

Principle cities: Boston, NY, Philadelphia, Baltimore, Washington D.C., Pittsburg, Buffalo.

NY is the largest & the most populated city of the USA (8,2 mln people accounting for about 40% of the population of NY State, 19,5 mln in its metropolitan areas).

The city’s known as the Big Apple – jazz musician’s slang for engagement was “apple” & a date in NY was the “big apple”.

As of 2005 NY accounted for nearly 8 % of the U.S. GDP.

NYC is the centre of banking, financial services and cultural activity for the US and the rest of the world. It still bears traces of its Dutch past in the names such as Harlem.

Boston is the largest city of New England & the 3^rd most populated in the Northeast. It’s known for the historic Boston Tea Party. Boston is considered to be the cultural & historical capital of New England. It’s also the major education centre hosting over 400 colleges & universities.

Philadelphia is the 2^nd most populated city in the Northeast & the 5^th most populated in the USA. The city where the D of Ind. & the Constitution were signed. It was the 1^st national capital (until 1790). December, 1, 1800 the seat of gov-t was transferred to Washington.
Washington D.C. has about half of its population employed in government services. Population – 0.6 million.

The region ranks as the nation’s most densely populated area (17% of the US total population).

New Jersey is the most densely populated state in the US (over 1,000 persons per square mile).

Northeast, and New England in particular was the nation’s first industrial centre. The largest states of the region, New York and Pennsylvania, became major centers of heavy industry in the 19^th century, producing iron, glass and steel.

In the second half of the 20^th century, most of New England’s traditional industries have been relocated to other states or foreign countries where goods can be made cheaper.

Yet today the Northeast is a powerhouse of economic output, producing 20% of the nation’s GDP with 17% of the population and only 2% of the nation’s land area.

The unemployment problem has been partly solved by the microelectronics, computer and biotechnology industries.

Massachusetts has become the leader in the high technology research and development in the region.

Like New England, the Middle Atlantic States region has seen much of its heavy industry relocate elsewhere. Other industries, such as drug manufacturing and communications, have taken up the slack.

Coal mining & related industries are important economic activities in the western part of the region (in Pennsylvania). Pennsylvania is also on of the leading steel producers in the USA. Pittsburg is a major steel production centre. In addition to manufacturing and trade, about 20% of the economic activity of the region is connected with services.

New England remains an important centre of the insurance industry (cities of Newark, New York, Hartford and Boston). Finance and insurance sector in the state of Delaware is the largest in the region.

Deepwater harbors help make the region a major centre of international trade. The busiest harbor is of New York City.

The region was an important gateway to America for people from many parts of the world. The point of entry was on Ellis Island in NY City’s harbor, through which 12 mln people passed between 1892 and 1954.

The Northeast is also the richest region in the United States.

In 2007, the wealthiest states included New Jersey (second), Connecticut (third) and Massachusetts (fourth).

Much of the region’s land is too hilly or rocky to grow crops. The soils are of poor quality.

Yet, in the Middle Atlantic States crops, fruits and vegetables are grown. In the New England states only one crop is produced – potatoes in the state of Maine.

Cranberries are grown in Massachusetts and blueberries in Maine. The Northeast is known for its fishing which was developed to offset the rocky land and poor soils.

Large numbers of flounder (камбала), cod, herring, halibut (палтус) are landed. Recently strict fish catch quotas have been imposed to preserve fish stocks.

Forested mountains, sandy sea-shores, scenic lakes etc. – tourism.

The Northeast is an ethnically diverse region. In contains the highest concentration of Italian-Americans and Irish-Americans and the 2^nd largest population of African-Americans, only behind the South. Practically no Native Americans.

The Northeast has the 2^nd largest Asian population in the United States: Indian, Chinese, Korean, & Philippine (in that order).

The Northeast has the 3^rd largest Hispanic population, after the West Coast & the Southwest.

The area is the centre of Ivy League universities – the association of 8 colleges. The term Ivy League primarily has connotations of academic excellence, selectivity in admissions & social elitism. They are: Brown, Columbia, Cornell, Dartmouth, Harvard, Pennsylvania, Princeton, & Yale. (+ common interests in scholarships as well as in athletics).

18. Assess the Great Depression of 1929-1932 in the USA, its causes & consequences. The New Deal of President F.D. Roosevelt to overcome the crisis.

The USA emerged from the World War I as a considerably strong economic power. After a short economic crisis of 1920 – 1921 (which was largely the result of growth in military industry and its reduction in the civilian sectors), there was a period of economic growth in 1923-1928, accompanied by an increase in the level and quality of life of Americans (the so-called “era of prosperity”). The USA became a world financial centre.

During the period of economic recovery new industries were rapidly developing: the oil-producing, electrical, chemical, electronic, aviation, automotive. A car was a symbol of “prosperity”. "Ford", "General Motors" & "Chrysler" accounted for 3/4 of world automotive production. U.S. took a leading position in the world in terms of export. At the same time traditional industries - coal, metallurgy, textiles - stagnated, accompanied by unemployment. The boom years were marked by a threefold increase in the value of shares of the New York Stock Exchange, millions of Americans were involved in gambling, hoping to get rich.

Panic at the New York Stock Exchange (Wall Street) on October 24, 1929 ("Black Thursday") was the first symptom of the crisis of the U.S. economy, which grew into the world crisis of the capitalist economy. On that day 12.8 million shares were sold. A few days later, on October 29 ("Black Monday"), the situation repeated with16.4 million shares sold. During the next 3 years, there was a 4.5 times decrease in their price.

The world economic crisis of 1929 – 1933 (the Great Depression) is known as the deepest and longest economic crisis in the history of capitalism. Currently, there are several points of view on the causes of the Great Depression. Historians consider it a crisis of overproduction; economists of the Keynesian school explain it by the imbalance between consumption and investment, the monetarist school of economists – by the inadequate functioning of the FRS (Federal Reserve System) whose activities were aimed at restraining money supply.

By the end of 1932, U.S. industrial production decreased by 46% (in comparison with 1929), agriculture – by 1/3^rd, foreign trade – by 70%. Crisis hit the banking system: during the first 10 months 744 banks went bankrupt, from 1929 to 1932 - about 6000 banks. Unemployment rose by 607 % (about 13 million people). The crisis caused a sharp drop in prices, especially for agricultural products. Deterioration of the living standards caused a wave of mass social movements. In 1931 and 1932 hunger strikes took place in Washington, with the demand to introduce the system of unemployment insurance & to provide aid for workers and farmers. The administration of President H. Hoover was forced to take a series of measures to overcome the crisis.

To help farmers and stabilize the agricultural market the Federal Farm Board (FFB) was created. It granted loans to those farmers who agreed temporarily not to sell products on the market. It also bought up (скупало) wheat and cotton to stop the decline in prices. To support the financial sector the National Credit Corporation (NCC) was founded, which provided loans to banks totalling $ 400 million. The next step was the creation of the Reconstruction Finance Corporation (RFC) with a capacity of 3.8 billion dollars, which provided financial aid (in the amount of $ 2 billion) to banks, insurance, mortgage (ипотечным) & railway companies. However, these measures failed to stop the decline in production and prices, the failure of banks (банкротство банков), capital outflow (утечку капиталов) & social protests.

In the midst of the crisis Franklin D. Roosevelt won the presidential election in 1932. By this time, the economic situation in the country was critical. The program of the new president, adopted in 1933 was called "New Deal" (Новый курс Рузвельта). Its principal difference from the previous anti-crisis measures consisted in the active government intervention in the economy. Its theoretical basis was the teaching of the English economist John Maynard Keynes (1883 - 1946) that emphasised the need for state regulation of the economy to provide the normal functioning of the market mechanism.

The main steps taken by Roosevelt’s administration to improve the health of the U.S. economy included:

1. The reform of the banking and financial systems. Measures were taken to "purify" the banking system of the economically incompetent banks; the exchange of paper money for gold was stopped; the export of gold abroad or its accumulation in private hands for the purpose of speculation were prohibited. The devaluation of dollar took place; the official price of gold was fixed at $ 35 per ounce. Due to the devaluation, the national debt declined, & export opportunities improved. The emission of new banknotes not backed (secured) by gold was launched as well as silver coin minting. This meant the abandonment of the gold standard and the introduction of bimetallism. Deposit and investment functions of banks were separated by the Glass-Steagall Act of 1933, deposit insurance was introduced. In 1935 a law was passed on banks, under which the powers of FRS to regulate stock exchange activities expanded.

2. Restoration of industry. According to the law "On the National Industrial Recovery"(1933), the industry was divided into 17 industry groups that adopted the so-called "codes of fair competition" («кодексы честной конкуренции»). The codes defined the output in the industry (объем производства в отрасли), the wages and the workweek (продолжительность рабочей недели). Entrepreneurs who agreed to participate in a "fair competition" received financial assistance from the government. All in all, 750 codes were adopted that covered 99% of industrial and commercial enterprises.

3. Agricultural rehabilitation. According to the law "On the regulation of agriculture" (1933) the state took the following actions to overcome the crisis of overproduction and prevent further deterioration of farms: buying land from farmers; bonus payments for reducing acreage (сокращение посевных площадей), livestock (сокращение поголовья скота), agricultural products (сокращение сельхоз. продукции), providing credit to farmers.

4. Organization of community works to create jobs and reduce unemployment. New jobs were created in the municipal sector, the construction of roads, bridges, airports, etc. (more than 4 mln. people were employed & waged).

5. The improvement of the social relations system. "The National Labour Relations Act" (known as the Wagner Act) was adopted. The workers were granted the right to form trade unions. The Social Security Act (1936) introduced pensions (65 years) and unemployment benefits. In 1938 a law was passed establishing the number of working hours per week (44), prohibiting child labour & defining the minimum wage on the enterprises of national importance.

Results. Implementation of the "New Deal" allowed to stop the decline of the economy and begin its recovery. However, the pre-crisis level of the economy was not restored until 1940, since in 1937 another cyclical crisis started in the U.S..

However, these reforms were important for both the American and world economy. They have demonstrated the role of government regulation of the capitalist economy system. Since then, state intervention in economic life in various forms has become an integral part of the U.S. market mechanism.

19. Outline the USA in the post World War II period (1945-1962). Characterize the Truman Doctrine & Marshall Plan.

After the end of the World War II the USA emerged as the leader of the capitalist world. During the war the U.S. national income doubled, the industrial production increased. This was largely due to the fact that the USA territory remained intact during the war and consequently its resources were several times higher than the resources of other capitalist countries.

The U.S. share in the total industrial production of the capitalist world was 60%, in exports - more than 30%, they possessed 2/3ds of the world 's gold reserves. Economic superiority of the United States was based on their financial power. In accordance with the new world monetary system established at the Bretton Woods conference in 1944, the dollar became the global reserve currency (мировая резервная валюта). Thus, the USA determined the fiscal policy (финансовую политику) of the International Monetary Fund and the International Bank for Reconstruction and Development.

After the war the reconversion of military production took place, and the U.S. economy entered into a recession. Marshall Plan and the Korean War helped to overcome this recession. In accordance with Marshall Plan from 1948 to 1951 the United States provided financial assistance in the amount of U.S. $ 13 billion to 16 European countries to rebuild their economy. The USA used Marshall Plan to expand their exports and increase investment in European countries. The Korean War (1950 - 1953) stimulated the development of military industries and employment growth (рост занятости).