How Did Roosevelt Solve the 1930's Usa Economic Crisis?

Topics: Franklin D. Roosevelt, United States, President of the United States Pages: 6 (2164 words) Published: October 17, 2008
When F.D. Roosevelt came to power, he faced one of the hardest presidencies in history. Following the economic boom of the 1920’s, America was thrown into turmoil after the Wall Street Crash in 1929. Overproduction and debt were the main problems. In the cities, expensive goods such as cars, fridges and radios were being manufactured at an overwhelming rate. In the countryside, farming was made easier by technology so farmers over produced goods, to increase profit, but the result of this was that prices were driven down by a fall in demand. Now farmers faced bankruptcy. The banks also had a crisis on their hands. People had been investing during the boom and making huge amounts of profit. A lot of this was done on credit - people paying with borrowed money. This meant that thousands were in debt, and when the Stock Market crashed, the banks wanted the loans back, and people could not pay so banks were also broke. The main aims of the New Deal were to help the farmers, give work to the unemployed, to help the needy, and to get industry back on its feet. The New Deal solved many problems, but either took some too far or not far enough. Roosevelt was prepared to spend huge amounts of money to accomplish his aims. There was a major wealth divide in America; money was not evenly spread out, so there were still people suffering major poverty, whilst others lived a life of luxury.

When Roosevelt came to power, he really did have his work cut out. He faced a country where everyone expected good things, following the last ten years of the economic boom, and now suffering depression, all they wanted were the good old days back. The Wall Street Crash was one of the main factors that crippled the American economy. By 1929, so many people were investing in the stock market and making huge profits that most companies were vastly over valued. As soon as some experts realised that it could not last as it was, and began withdrawing their shares, others followed suit until everyone knew there was something wrong, and tried selling their shares. This resulted in mass panic, and a lot of people couldn’t find anyone to sell their shares to. Because so many people had bought their shares on credit, they were left in debt which they could not repay. This caused a knock-on effect on the banks, which were owed huge amounts of money which would not be refunded. There was mass unemployment in the depression - as so many businesses had to close so people lost their jobs. Also, owners of companies often did not have enough money to employ a full team of staff anymore, so they had to make job cuts. This was common on farms. Unemployment, of course, lead to poverty. People could not find jobs and were left with no money, so they and their families suffered. When the production line arrived in the 20’s, it was a great new way of manufacturing goods, making it cheaper and faster than ever before. Wealthy people suddenly purchased a modern range of consumer goods, in particular fridges, cars and radios. This meant that by the 30’s, everyone who could afford these luxury items had either bought them, or could not afford them, so now nothing was being bought. This caused factories to produce less, which meant they cut their work staff, along with wages when profit became low. In the countryside, agriculture was in ruin. Even though it did not benefit hugely from the booming 20’s, it hit an all time low. With new technologies, farmers were producing huge amounts of food more easily than ever before. This overproduction led to demand falling, which dragged the prices down as well. To make things worse, many farmers thought that making yet more food would give them a higher profit, but it simply pushed the prices lower. Also, a vast area of farm land (the Tennessee Valley) was turning rapidly into wasteland as it was flooded and dried out constantly by the weather. To top off the economical and agricultural...
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