The Great Depression N The New Deal


Causes and Effects of the Depression , 1929-1933

In the 1920's the stock prices were constantly fluctuating up and down until a Thursday late in October.On Thursday , October 24,1929 the stock market crashed. When the stock market crashed the causes for people were uneven distribution of income , stock market speculation , excessive use of credit , overproduction of consumer goods , weak farm economy and government policies. The effect was that all of the goods and services produced by the nation dropped from $104 billion to $56 billion in four years.

Hoover's Policies

President Hoover had the need for more direct government action. Hoover's first major decision concerning the international situation was one of the worst mistakes of his presidency. In June 1930 , Hoover signed into law a schedule of tariff rates that was the highest in history. The effect of this was to reduce trade for all nations , meaning that both the national and international economies sank further into depression. Later the conditions of the Dawes Act for collecting war debts could no longer continue. The international economy suffered from massive loan defaults , and banks on both sides of the Atlantic scrambled to meet the demands of the many depositors withdrawing their money.

By 1931 everyone was convinced , including President Hoover, that some government action was need to pull them out of economy troubles. He then supported and signed into law programs and offered assistance to indebted farmers and struggling businesses .

Franklin D. Roosevelt's New Deal

Franklin D. Roosevelt was the child of a wealthy New York family. He would dominate the nation and the U.S. government 12 years and 2 months. He would prove to be one of the most influential world leaders of the 20th century. In 1920 he was the Democratic nominee for vice president . He and James Cox, the presidential candidate , lost badly in Warren G. Harding's landslide victory. In his campaign in 1932 , Roosevelt offered promises but no concrete programs. He did not have a detailed plan for ending the depression. It became clear to his New Deal programs were to serve three R's : relief for people out of work , recovery for businesses and the economy as a whole , and reform of American economic institutions. The nation was desperate , Immediately after being sworn into office on March 4 , 1993 , Roosevelt called Congress into a hundred-day-long special session. In the late 1933 and through much of 1934 , the Democratic Congress was easily persuaded to enact the following : The Civil Works Administration , The Securities and Exchange Commission , and The Federal Housing Administration.

The Second New Deal

Roosevelt's first two years in office were focused on achieving one of the three Rs : recovery. In the summer of 1935 , the so called second New Deal was launched. Harry Hopkins become important in Roosevelt's Administration and created Works Progress Administration in 1935 , which was much larger than the relief agencies of the first New Deal. The second New Deal reflected Roosevelt's belief and industrial workers and farmers needed to receive more government help . The National Labor Relations Act , Rural Electrification Administration , and Federal taxes were made to help those people. The Social Security Act was also used to help people. The Election of 1936 was when the Democrats nominated Roosevelt for a second term. Because of his New program and active style of personal leadership.