American History

The 1920s was seen as a decade of prosperity and progress.  Investors began to buy stocks on margin which allowed them to pay a small down payment on the stocks price and borrowed the rest of the money to purchase the stock on the assumption that the value of the stock would continue to rise. This prosperity started to decline in September, 1929.  By October, the prices of stocks fell sharply and people rushed to sell the stock they held before the price of the stocks fell even lower.  After the stock market crash, banks demanded payment on the loans people took to pay for stock. When people lost money on their investments they defaulted on their loans and the banks ran short on money.  People rushed to withdraw their money from banks, but some banks ran out of money and banks simply closed.
         
The stock market crash had a detrimental effect on consumer confidence and people were not willing to spend money.  Businesses were forced to go bankrupt and workers lost their jobs. The unemployment rate shot up to 25 by 1933. This depression was felt worldwide and paralyzed the United States socially, politically and economically. President Herbert Hoover felt that if the government interfered with the economy it may do more harm than good.  Hoover believed in rugged individualism and felt people should rely on charities and volunteerism and did not support government relief programs. The people of the United States were looking to the government for help and the Democratic Party nominee Franklin Delano Roosevelt gave people hope for change.
         
On March 4th, 1933, Roosevelt was inaugurated and made the assertion that the only thing we have to fear is fear itself. The new president offered new ideas to pull people through their hard times and fundamentally change the structure of the government.  In the first 100 hundred days of his presidency Roosevelt took swift actions centered around relief, recovery and reform. Roosevelt offered the New Deal to the American people to fight against the Great Depression. Roosevelt declared a bank holiday and promised that banks would reopen when they were in good enough shape to reopen. Roosevelt used the radio to reach people with his fireside chats. Roosevelt used this approach to reassure the American people that it was safe to put their money back into the banks.
         
Some of the most notable programs from the first 100 days of his presidency included the Federal Emergency Relief Administration (FERA), Tennessee Valley Authority(TVA), Civilian Conservation Corps (CCC), Federal Deposit Insurance Corporation (FDIC), and the National Recovery Administration (NRA). This alphabet legislation addressed the key themes of relief, recovery and reform that he promised to the American people. In 1935 FDR offered a second new deal to the people including the Social Security Act and the Work Progress Administration.  Critics of the New Deal attacked Roosevelt for borrowing money to fund government relief programs. The Great Depression lingered on in spite of the New Deal. The New Deal did not end the Great Depression and at times in Roosevelts presidency it appeared that people had lost confidence in Roosevelts programs. Defense spending during World War II helped stimulate the economy and pulled the United States out of the Great Depression.
         
Roosevelt inherited tremendous problems when he took office and offered programs that would offer relief, recovery and reform in the United States government. Roosevelts programs have left an indelible mark on the United States government that will likely effect Americans for generations to come.