The Great Depression
...These price supports proposed that the government would buy surplus crops at prices which were higher then the market rate. The government would then sell these crops to other nations for the normal price. But unfortunitly this bill was never passed because president Coolidge believed that farmers have never made money and that their was nothing they could do about that. By the late 1920’s Americans were spending less money and buying less, due to the higher prices and weak job wages. Many families bought many of their goods on credit, which let people buy whatever they wanted and could pay banks back later. But because of this easy way of paying for things many Americans piled up these bills and many fell into major debt. With the economy failing Americans hoped for a rebound with the help of their new president Herbert Hoover. The election which took place in 1928 saw a very easy victory for republican Herbert Hoover, who ran his election on saying that “ We in America are nearer to the final triumph over poverty than ever before.” By 1929 the economy was showing serious warnings of a big decline. Due to the rise in unemployment many Americans tried their luck in the Stock Market, even though many economists were seeing many weaknesses in it. People didn’t really seem to care and on October 24, 1929 ( known as Black Tuesday) the bottom fell right out of the market. Investors tried hard to try to sell their stocks before the day was over, a record 16 million shares were dumped that day. By the middle of November, investors had lost over 30 billion dollars in the Stock Market. Because of the declining Stock Market many banks lost lots of money and were not able to repay the withdrawals of their customers. By 1933, around 6,000 banks had closed down. Many people who tried to get their savings back from the banks came home empty handed. As the economy continued to decline, millions of workers lost their jobs. Unemployment jumped from 3 percent of the work force to 25 percent of the work force in just four years. Millions of families were forced to live in shantytowns and rely on Soup kitchen just to survive. Many people became mentally ill due to their lack of will to survive. The suicide rate rose thirty percent by 1932 and many people turned to mental institutions for help. Herbert Hoover was becoming a little scared after the Stock Market crash on October 29, 1929 and tried drastically to reassure Americans that the economy was not so bad. Hoover tried to take drastic steps in trying to boost up the economy. The first step he took was in 1930, by directing federal funds into projects such as the construction of Boulder Dam which he hoped would jump-start the economy and add jobs. Another big step which Hoover took was passing the Federal Home Loan Bank Act, which lowered mortgage rates for homeowners and allowed farmers to refinance their farm loans and avoid foreclosure. His last step, and the one he was most proud of, was the Reconstruction Finance Corporation which provided emergency financing to banks, life insurance companies, railroads, and other large businesses. This bill which was passed did help the economy out. Five months after it was passed the agency loaned out 805 million dollars to large corporations. But businesses still continued to fail. An angry group of WWI veterans which went by the name of The Bonus Army tried drastically to get promised money from Herbert Hoover. Hoover, scared of the negative attention, sent out 1,000 soldiers to stop this group of strikers. Hoover then received even more negative attention and was now scared of not being re-elected. By the 1932 election Americans were clearly ready for a change. Thanks to The Bonus Army, up in coming candidate for president, Franklin Delano Roosevelt, had an easy victory over Herbert Hoover in the 1932 elections. FDR was greatly favored because of his proposal of a New Deal. FDR’s three major structures of his New Deal proposal were: relief for the needy, economic recovery, and financial reform. To help the needy FDR implemented programs to help struggling farmers and other workers. Many programs were started due to the Roosevelt administration, like the Agricultural Adjustment Act (AAA) and the Civilian Conservation Corps (CCC). Both these programs tried to help farmers and underage workers by providing many job opportunities and making it easier for them to get these jobs. For an economic recovery FDR passed the Federal Securities Act in 1933 which required corporations to provide complete information on all stock offerings and made them liable for any misrepresentations. This helped regulate illegal stock buying and bring down many corrupted businesses. For financial reform FDR tried to reorganize the bank system. Many Americans didn’t trust banks anymore and FDR tried to change their views by declaring a bank holiday, he then closed all banks for a day to prevent anymore withdrawals. Then he passed the Emergency Banking Relief Act , which allowed the treasury to inspect the countries banks. If the treasury inspected any bank to be in debt those banks were made to stay closed; and the banks that looked to be in good shape were allowed to remain open. This prompted the attraction of people to banks again, knowing that if they put money in these banks that they would be ab...