Depression And New Deal
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Great Depression and New Deal
The Great Depression first started as early as 1928, but did not affect the United States until 1929. The Great Stock Market crash started the event of the Depression here in America, but was not the main cause to why it happened. During the early stages of the depression, President Hoover failed to help the economy and continued with his belief system of giving people the least help they needed, so they can earn themselves a rightful spot with pride, not with government’s help. The Great Depression was a very intense experience for us, even until today, the results still affects us.
During the 20s, the economy of the US was rising at such a steady pace, that many were able to gain from the era known as the Booming Twenties. One major industry that brought many Americans to have a pleasant comfortable life was in playing the stock market. 9 million Americans invested in the market, which made quick profits, but with money borrowed. Stock buyers were naДЇve and believed the bull marketing will still continue to increase, but Federal Reserve warns the people of an economic distress will occur soon. Of course, no one listens as they continue to swim in their money. On October 24, 1929, shareholders panicked as they rushed to sell their stocks and led to the downfall of the stocks.
Although the stock market crash did mark the Depression Era, it was not the main cause, but rather it was more of a social problem that caused this disaster. The misdistribution of wealth between the rich and the poor was too large, with no middle class, or working class, to balance the too sides. As the poor became poorer, they could no longer afford luxury items, and the rich no longer needed so many cheap items. So overproduction was a great impact on the production industry, as well as on agriculture, where the decline of farm prices was great, and since the industrial revolution and World War 1, had not been benefited. Technology pushed people out of jobs and the US out of the trading cycle of the world. But the US added higher tariffs, the other countries rebelled and posted their own tariffs, so no country had money flowing in or out.
Within 3 years, the GNP dropped by almost 50% from $104 billion to 459 billion. Since we had a weak banking system, more than 5,500 banks closed down and people lost all their money that was inside, with no guarantee of ever getting anything back. Farm prices decreased by 60% of what it’s normally worth and the only thing that seemed to increase was unemployment rates, from 3% to 25%.
Our president during this time, Hoover urges everyone to remain optimistic and wanted strong faith from volunteers. But these volunteers were also in the same state as the people. He asked businessmen to maintain wages and employment, and asked states to help those unemployed. But since there was no business, we can see how this did not turn out for Hoover and once he tried to start something to help relieve the people, it was too late. Congress created the Reconstruction Finance Company to offer up to $2 billion dollars to attempt to keep things alive in banks and states. The Bonus March was led by the veterans of World War 1 wanted their bonus to survive, but was denied the promise. Those that did not leave after the announcement was taken on by the troops and symbolized Hoover’s response to Americans and was a great blow to his presidency and chances to become president again. Roosevelt became out next president in 1932.
With the support of the blacks, who switched over to the democratic sides, Theodore Roosevelt became the first president to come into office in January. At his office, he wanted to experiment with what he can do and what will fail. Taking the examples, he set up in New York; he set out to make new acts, which falls under his three R principles: Relief, Recovery, and Reform. His “Brain Trust” group was a group of great people who helped Roosevelt with his work and were experts in their field. Roosevelt was a great speaker, had a talent for surrounding himself with capable people and the determination to succeed. Eleanor Roosevelt