The stock market crash of October 29, 1929 provided a dramatic end to an era of lopsided prosperity. This disaster had been going on for years. Different historians and economists offer different explanations for the crisis. Some blame the increasingly uneven distribution of wealth and purchasing power in the 1920s, while others blame the decade’s agricultural slump or the international instability caused by World War I. In any case, the nation was unprepared for the crash. For the most part, banks were unregulated and uninsured. The government offered no insurance or compensation for the unemployed, so when people stopped earning, they stopped spending. An ordinary recession became the Great Depression, the defining event of the 1930s.President Herbert Hoover was slow to respond to these events. Though he believed that the “crazy and dangerous” behavior of Wall Street speculators had contributed in a large way to the crisis, he also believed that solving such problems was not really the federal government’s job. He asked big companies to keep workers’ pay steady, and he asked labor unions to stop demanding raises. Still, the crisis worsened. Between 1930 and 1933, more than 9,000 banks closed in the U.S., taking with them more than $2.5 billion in deposits. Still, unemployed people did whatever they could, like standing in charity breadlines and selling apples on street corners, to feed their families.
A New Deal for Americans
By 1932, many Americans were fed up with Hoover and what Franklin Roosevelt later called his “hear nothing, see nothing, do nothing government.” The Democratic presidential candidate, New York governor Franklin Delano Roosevelt, promised a change: “I pledge myself,” he said, “to a New Deal for the American people.” This New Deal used the power of the federal government to try and improve the economy. Roosevelt won that year’s election handily.
The First Hundred Days
The new president said, “wage a war...