New AmericaNew AmericaThe stock market crash of 1929 helped launch the United States into the worst economic depression in history. The severity of the Great Depression called for an immediate way to recover what was lost and some relief to the victims. Franklin D. Roosevelt was nominated for president in 1932, in his inauguration he stated , “ I pledge you, I pledge myself, to a new deal for the American people”(5). Little did he know, his plan was one of the hallmarks of economic and social reforms in history. Roosevelt was that man to pull America through the Depression.
Franklin D. Roosevelt was born in Hyde Park, New York on January 30, 1882. His parents and private tutors provided him with almost all his formative education. He received a BA degree in history from Harvard in only three years (1900-03). Roosevelt next studied law at New Yorks Columbia University. In 1907, he left school without taking a degree. For the next three years he practiced law with a prominent New York City law firm. He entered politics in 1910 and was elected to the New York State Senate as a Democrat(7).
Roosevelt was reelected to the State Senate in 1912, and supported Woodrow Wilsons candidacy at the Democratic National Convention. As a reward for his support, Wilson appointed him Assistant Secretary of the Navy in 1913, a position he held until 1920. His position prepared him for his future role as Commander-in-Chief during World War II. Roosevelts popularity and success in naval affairs resulted in his being nominated for vice-president by the Democratic Party in 1920. Many were against Wilson’s plan for U.S. participation in the League of Nations causing many votes towards Warren Harding into the presidency, and Roosevelt returned to private life.
While vacationing at New Brunswick in the summer of 1921, Roosevelt caught poliomyelitis. Despite courageous efforts to overcome his crippling illness, he never regained the use of his legs.
With the encouragement and help of his wife Roosevelt resumed his political career. In 1928 Alfred E. Smith became the Democratic candidate for president and arranged for Roosevelts nomination to succeed him as governor of New York. Smith lost the election to Herbert Hoover; but Roosevelt was elected governor.
Following his reelection as governor in 1930, Roosevelt began to campaign for the presidency. While the economic depression damaged Hoover and the Republicans, Roosevelts(democrat) bold efforts to combat it in New York benefited his reputation. In Chicago in 1932, Roosevelt won the nomination as the Democratic Party candidate for president. He then campaigned calling for government intervention in the economy to provide relief, recovery, and reform. His activist approach and personal charm helped to defeat Hoover in November 1932 by seven million votes(6).
All aspects of American society suffered during the Great Depression. By 1932, there were millions of people unemployed.. There was no security for the millions who lost all of their savings in the bank failure or stock market crash. Volunteer organizations attempted to help the needy, but their resources were simply not adequate (Madaras and SoRelle 218). Hope seemed non-existent. Americans had never seen such a severe depression. The New Deal was Roosevelts attempt to restore the economy. His willingness to act decisively and experiment with new policies set him apart from previous presidents(Tindall and Shi 1238).
The first order of business for the Roosevelt administration was financial reform. Banking is a crucial aspect of capitalism and Roosevelt was very aware of this fact. On his second day in office, Roosevelt called Congress to meet in a special session. The outcome was the Emergency Banking Relief Act, which permitted stable banks to reopen and provided managers to those who remained in trouble. The Glass-Steagall Act separated commercial and investment banking and created the Federal Deposit Insurance
Corporation. These actions all helped restore banking confidence within Americanpeople. Roosevelt ensured that it was safer to “keep your money in a reopened bankthan under the mattress”(Tindall and Shi 1238). After accomplishing this task, the newadministration was ready to solve other problems.Other financial programs included the Securities and Exchange Commission (SEC), National Industrial Recovery Act (NIRA), and the Agriculture Adjustment Administration (AAA). The SEC functioned in regulating the stock and bond markets. The NIRA and AAA were aimed at recovery through regulation. The NIRA played a big role in restoring confidence in the system and helped to increase demand and wages. The NIRA did work for a short
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7 month period after the collapse of the World Bank. This is when the market recovered,and in fact restored some of that confidence. To this date, many other financial programs remain under the supervision of the SEC under the supervision of the NAIC, though the SEC’s role has declined, although it continues to do so. The SEC also plays a powerful role in enforcing the Fair Practices Act , which is a federal law dealing with the conduct of financial practices. The act prohibits discrimination on a class basis against any agency, agency, or group that practices commercial banking or is known to pose a health or safety problem; or
, as an example, against an agency (the “National Transportation Safety Board”), the National Highway Traffic Safety Administration (NHTSA), the National Aeronautics and Space Administration (NASA), or any other professional organization for which an agency has a public record and is described in Article I.3.1(A)(2). The NHTSA would not do that under the Fair Practices act (see the section on federal agencies, §23(c), Section 23(d)); however, it has a role in investigating investigations of commercial practices.
It is common knowledge that a significant number of commercialbanks’ own money was laundered via U.S. banks. We know that some of these bank transfers were not properly reported under the Internal Revenue Code of 1986, as shown above, but many were reported under “bank reporting” statutes. In 1991, the IRS reported that $300 million was held as notes (which could only be repaid if the notes became untraceable) under an unregistered wire transfer. The account was not reported for $50 million, but it was reported $15 million and $5 million, respectively, on the day of bankruptcy. In addition, in 1992 the Department of the Treasury reported that $300 million was in a “debtor’s charter” after the end of the financial crisis, but did not specify what that meant. The accounting system in use in 1986 and 1987 allowed that the notes were stored in an escrow account with a credit union.
In 1995, the Treasury Board, which had jurisdiction over the bank, reported a recordkeeping error of $600 million, a number that appears to have been fixed without any notice to the FDIC in March 1996. The auditors concluded that the $600 million number should have been reported by April 1996, but did not. The IRS reported $3.75 billion of $300 million misreporting; another $400 million misreporting. However, the tax rules were changed to allow for $1 billion in unpaid notes, but by 1994 the IRS was aware of the errors. In 1997, a $1 billion tax error resulted in $600 million of unpaid notes.
Because of a failure at the end of 1996 to report even a