President Hoover and The Great Depression

There have been many historic events that have led to how the United States is ran today. Some affecting the county in negative ways, some affecting the country in positive ways. One of the most influential events still spoken about until this day is The Great Depression. Although other countries were involved as well as affected by this past event, the U.S. was one of the countries that sustained some of the most detrimental effects. This event left many Americans without homes, without food, and without jobs. Production and trade began to slow, farmland was destroyed and banks could not stay afloat. This forced many people to migrate from the east to the west in search of work and a better life.

In the 1920’s, or as it was called the “Roaring Twenties”, America was one of the most powerful countries, not due to the strength of the military but because America was known as one of the wealthiest countries at the time. America had the largest economy in the world, but due to few bank regulations, a lack of jobs and a lack of exported goods, the economy began to plummet.

Known as one of the most notorious events in history, the Great Depression was not caused by a single event, but rather a multitude of events. The effects of the Great Depression were far worse that what anyone had expected. Prior to this event, America was thought to become one of the most prosperous countries in the world.

The first of many factors that sparked this event was “Black Tuesday”, also known as the day when the New York Stock Exchange crashed on October 29, 1929. Rumors about potentially earning easy money had caused billions of people to invest all their money into the stock exchange. This sparked a rapid expansion in the NYSE and many failed to realize that the stock they were purchasing was not worth paying for. Investors were selling overpriced stock in masses to anyone and everyone. At the same time, production began to slow and unemployment was on the rise. Many people did not realize the debt they were accruing and before they knew it, their money was gone.

According to history.com after the crash of the stock exchange, industrial production had diminished by nearly half of what it was which only led to more unemployed. The number of homeless and hungry Americans began to rise quickly and was becoming more and more common in much of the U.S. If it couldn’t get any worse, severe droughts lasting a year had begun to occur bringing dust from Texas to Nebraska. These swarms of dust killed crops and livestock, and had also caused many to become ill. This became known as the “Dust Bowl” and inspired migration of massive proportion from the farmlands to the cities looking for work and a better life.

Throughout this time, the president was trying to reassure his fellow Americans that all would run it’s course and things would return to normal. Unfortunately at this time, President Hoover was trying to support many failing banks with government loans, another factor influencing the Great Depression. As the banks began to fail, people began to lose whatever money they had left. This was prior to the initiation of federally insured banks. What had incurred during this time were known as “bank runs”. This term referred to people withdrawing their money from the bank in a frenzy, thereby leaving the banks to close. During this time, more than 9,000 banks had closed their doors. The banks that were left standing were unsure of what the future had to hold for them. With such uncertainty, banks stopped lending money, and because they could not lend money, people began to spend less money.

As a result of people spending less money due to either losing the money they had, or being unable to obtain loans, people began to spend less money so there was a reduction in purchasing. This in turn led to a decrease in produced goods. This is what had lead to the initial increase in the rate of unemployment. WIth production at an almost standstill, many people were losing their jobs. They were unable to pay for items they had on loan, and even unable to pay for their homes. By the election of 1932 people were tired of a president that only gave them false hope, and thus president Franklin D Roosevelt was elected in a a way of new hope.

With a new president in office people were given hope that they could somehow over come these dark days. All remaining banks were ordered to be closed due to not having enough money, with this US treasury did not have enough money to pay government employees. While people began to get even more worried, President Roosevelt addressed the nation with a calm soothing tone with one of his most famous lines ‘the only thing we have to fear is fear itself.”(history.com)

President Roosevelt, had many objectives that he had to put into place in order to restore the US economy. One of the first was aimed to create jobs and start stabilizing the country. He created “Federal Deposit Insurance Corporation (FDIC) to protect depositors’ accounts and the Securities and Exchange Commission (SEC)”(history.com). FDIC and SEC were put into place to protect people from loosing and trusting the bank system with their money. These agencies prevented anyone from committing fraud and other abuses that caused the first stock market crash. People began to see a glimpse of hope as he bang to creat administration that helps unemployed Americans bring food home to their families. FDR knew that one of the first of many actions that he had to take was creating jobs, in order to help Americans get out of the financial and emotional hole. Many of the administrations included the AAA (Agricultural Adjustment Administration) stabilized farm prices and thus saved farms. The CCC (Civilian Conservation Corps) provided jobs to unemployed youths while improving the environment. The TVA (Tennessee Valley Authority) provided jobs and brought electricity to rural areas for the first time. The FERA (Federal Emergency Relief Administration) and the WPA (Works Progress Administration) provided jobs to thousands of unemployed Americans in construction and arts projects across the country. The NRA (National Recovery Administration) sought to stabilize consumer goods prices through a series of codes. Through these administration many jobs were created and thus bringing unemployment rates down.

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