The Great Depression and the New Deal
The Great Depression started with the absolute breakdown of the stock market on October 24, 1929, when almost thirteen million shares were sold. The effect was prolonged to October 29 when more than sixteen million shares were traded, making the day to be forever regarded as Black Tuesday. The worth of many shares fell considerably, leaving economic destruction and anxiety on its outbreak. There has never been a breakdown in the market that has had such a shocking and permanent impact on the economy. Businesses shit down, and financial institutions failed in their large numbers as a result of the collapse, rendering many jobless. Salaries for those still lucky enough to have jobs reduced significantly. The value of money decreased as the demand for products declined. In Franklin Roosevelt and the New Deal by William E. Leuchtenberg, the economic success of the Depression is evident. “In three years, the term of Herbert Hoover’s regime, a significant loss had been experienced in the stock market, and industrial production had been reduced by more than half” (Leuchtenburg 12).
Many of the agricultural sectors of the economy had been in severe distress for years. The coming of the Depression almost removed it overall, and drought that caused the 1930s Great Plains Dust Bowl aggravated the destruction. The government itself was extremely overwhelmed for income at all sectors as tax revenue reduced, and the government during this time was more confined in its capacity to react to the financial problem than it is today. The global system of world trade also collapsed, and every county tried to safeguard its industrial base by exercising high taxes on imported products. This only aggravated the issue.
Social Effects of the Great Depression
By 1932 United States business production had been reduced by half. One-fourth of nearly fifteen million employees were laid off from work, and there was no such thing as job security. Hourly pay had declined by around fifty percent. Many financial institutions had collapsed. Prices of agricultural commodities dropped to their knees since the Civil War. There were more than ninety thousand industries that collapsed totally.
Figures, however, can only partly explain the unusual challenges that many American citizens went through. For almost even unemployed individuals, some dependents required to be taken care of and accommodated. Such immense poverty and lack of food had never been experienced in the United States before. Early tycoons stood on street corners to sell apples at five cents apiece. Many impoverished shantytowns known as Hoovervilles, in respect of the unlucky Republican PresidentPresident who presided over the crisis, emerged all over the state to house the homeless. Individuals slept under Hoover blankets (old newspapers) in the corridors. People patiently waited in bread queues in each city, with an anticipation of something to eat. In 1931 only more than twenty thousand Americans committed suicide.
Anyone who has some little cash was fortunate. A new house could be bought for less than three thousand dollars. A man’s outfit was sold at ten dollars, a shirt of less than five cents apiece, and a pair of shoes that cost about four dollars. Milk was sold at ten cents a quarter, a pound of steak only at twenty-nine cents, and a loaf of bread a nickel. To cry to the government, at least during the Hoover period, was futile. There was no federally funded safety net of welfare plans to cushion the working class from sinking into poverty.
The New Deal
In 1931 the incumbent PresidentPresident, Franklin Roosevelt brought a sigh of optimism and confidence that swiftly attracted many people to the marvelous of his program, branded as the New Deal. “The only thing we have to fear is fear itself,” the PresidentPresident pronounced in his inaugural speech to the country. He was committed to making effective reforms during his term. Roosevelt acted quickly to address the financial challenges that crippled the country. In his first time in office, he ordered William Woodin, Secretary of the Treasury, to come up with an emergency investment bill and gave him less than five months to prepare.
The New Deal, in a way, just introduced forms of economic and social changes familiar to many Europeans for more than a decade. Also, the New Deal characterized the conclusion of a future tendency toward desertion of laissez-faire capitalism, turning back to the rules of railroads experienced in the 1880s, and the number of states and state reform regulation established in the government.
During Roosevelt’s presidential inauguration, the banking and credit system of the country was in a condition of paralysis. With surprising speed, the country’s financial institutions were the first shut down and then reopened only if they hand money. The government adopted a rule of moderate currency inflation to begin an upward trend in product prices and to afford some support to borrowers. New administration establishments introduced generous loan facilities to business and agriculture. The Federal Deposit Insurance Corporation insured sayings that are bank deposits of more than five thousand dollars, and stringent rules were put in place to regulate the sale of securities on the stock exchange.
Under the administration of Roosevelt and his New Deal, the administration’s obligation in America improved more than any period before. During this period between 1932 through 1940, there were various illustrations of the development of the government. Around thirty-two government establishments were developed during the eight-year term. Although most of the establishments designed have been eliminated or substituted by another, some institutions still exist today. Leuchtenberg summarizes the level of reform that happened during the New Deal. The six years from 1933 through 1938, marked a considerable confusion in American establishments than before. The institutions and plans that were developed prove to be helpful to the success and development of the leading country in the globe.
Works Cited
Dallas County Community College District Media Library, dcccd.yuja.com/V/Video?v=328394&a=817919733&isPlaying=false&startTime=1.
Leuchtenburg, William Edward. “Franklin D. Roosevelt and the New Deal, 1932-1940.” (1963).
Roosevelt, Franklin D. “Address to the Commonwealth Club.” San Francisco, California, September 23 (1932): 1932.