The Great Depression and The New Deal

After four years of conflict, the first World War was finally over. Americans emerged with economic prosperity and cultural change known as the “Roaring 20s”. America’s economy boosted drastically. US troops were back from World War I and with women entering the work force meant more people had more money to spend. By 1929, America’s wealth more than doubled. Soon, production started to slow down, leading to the crash of the stock market on October 24, 1929, known as “Black Thursday”. The crash of the stock market put the wealth of the “Roaring ‘20s” to an end. The immense differences between the rich and the poor became apparent. The unsuccessful sell of products due to the stock market crash caused the prices of products to drop, which led to unemployment. When workers didn’t have enough money to consume products, investments were overestimated and credit froze, which resulted in less money in circulation. The stock markets crash combined with financial panic, descended the American economy. American’s grew homeless and jobless.

During the 1928 election, President Herbert Hoover promoted higher tariffs as a way of boosting domestic consumption and avoiding foreign competition in sales. In 1930, President Hoover signed the Smoot-Hawley Tariff, the highest tariff in American history. The Smoot-Hawley Tariff caused foreign countries to respond similarly in response to the high tariffs and international trade had ceased. Still, the population of unemployment grew. The economy was the worst that it has ever been in history. In order to aid American’s, President Hoover established the President’s Organization for Unemployment Relief also called “POUR”. POUR assisted organized local charities to give to those in need. However, the growing needs of the people multiplied with homelessness and starvation. It didn’t take long for charities to run out of money. People fled jobless cities and moved to the country looking for work. State officials began to put up barriers to prevent migration of the fleeing cities, but it didn’t prevent the fear of foreign workers accepting lower wages. September 8, 1930, the Hoover administration issued a press release on immigration laws under existing conditions of employment, concluding that this might include denying visas to almost all alien laborers. Over 54,000 people were deported. Surprisingly, an additional 44,000 deportable aliens voluntarily left. During President Hoover’s time in office, he was unable to improve the economy. After the third year of the great depression American’s greatly depended on the government for an escape of the Depression.

With confidence to rise out of the Great Depression, in 1928, Franklin D. Roosevelt became governor of New York. Franklin D. Roosevelt presented the first widespread unemployment relief program. In fear of this being a threat to freedom, former President Hoover objected the use of government. Roosevelt felt that the government had an obligation to the American people, “Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed just as other countries have had them for over a decade. What may be necessary for those countries is not my responsibility to determine. But as for this country, I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return. I do not want to think that it is the destiny of any American to remain permanently on relief rolls. Those, fortunately few in number, who are frightened by boldness and cowed by the necessity for making decisions, complain that all we have done is unnecessary and subject to great risks….I believe with Abraham Lincoln, that “The legitimate object of Government is to do for a community of people whatever they need to have done but cannot do at all or cannot do so well for themselves in their separate and individual capacities.'

On March 4th, 1933, in Roosevelts first Inaugural Address of the Democratic Party, Roosevelt memorably announced the New Deal Legislation, “This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” (Franklin Roosevelt). The New Deal legislation was a set of government programs intended to repair the Depression and prevent future Depressions through relief programs, recovery programs, and the reform programs. In the First Hundred Days in office, Roosevelt made implementations designed to lift the nation out of the Great Depression called the “New Deal”.

The First Hundred Days stabilized the American economy, however unemployment remained high. Critics were concerned that the New Deal was not enough to pull America out of the Great depression. Former President Herbert Hoover faulted Roosevelt saying, “Roosevelt was either operating out of sheer opportunism, with no coherent purpose of policy or was conspiring to impose “European ideas” on the United States.” (Herbert Hoover).

President Roosevelt worked with congress to reconstruct the New Deal known as the Second New Deal that offered fair wages to workers. In 1938 Congress passed the Fair Labor Standards Act, creating a fairer minimum wage. Workers responded with protests for better pay and hours. Democrat Senator, Huey Long, protested the injustice in the economic system. Senator Long proposed a “Share Our Wealth” program in which the government would take money of the extremely rich and redistribute it to the poor through definite minimum incomes. In the same year, the Social Security Act was passed, which provided old age pensions, unemployment insurance, and economic aid to assist the elderly and dependent children based on pay roll. The new deal was limited to the population in its entirety. Women and people of color failed to benefit from the New Deal programs.

In 1936 Roosevelt was reelected in hopes of improving the economy with more dramatic changes. However, congress shut down most of Roosevelts plans. Roosevelt struggled to build new improvements to the New Deal, and with the threat of war in Europe the New Deal was overlooked.

When the Great Depression ended is still up to debate. During this time, Americans greatly depended on the government to be freed from unemployment, homelessness, and starvation. The legacy of the New Deal still remains molded in American politics, fear and greed are still alive. The Depression didn’t just affect the United States, it was felt globally. This allowed other countries to do things they wouldn’t normally be able to get away with. American’s focus shifted towards war and casted a shadow on the Depression. Despite the great advances from President Franklin Roosevelt the Depression was still felt after two generations.

Works Cited

1. The American Yawp: A Free and Online, Collaboratively Built American History Textbook. Edited by Joseph Locke and Ben Wright (Stanford: Stanford University Press, 2019). [License: CC BY-SA 4.0]. (accessed 10 November 2019).
2. Herbert Hoover. “On the New Deal and Liberty”, Official Report of the Proceedings of the 21st Republican National Convention, 1936, pp. 115-19, 122-24. (accessed 10 November 2019).
3. Fireside Chat 6: On Government and Capitalism (September 30, 1934) . Authored by: Franklin D. Roosevelt. Provided by: The American Presidency Project. Located at: http://www.presidency.ucsb.edu/ws/?pid=14759. License: Public Domain: No Known Copyright. (accessed 10 November 2019).