The Great Depression

The election of Franklin Delano Roosevelt in 1932 was an immediate repudiation of the Republican Party and their thirty years of reign. More specifically, the anger was directed at Herbert Hoover, The President of The United States. Herbert Hoover was at the helm of the worst economic crisis that has since been labeled The Great Depression. And, it was Franklin Delano Roosevelt who promised Americans hope through his plan for a new America. This plan was called The New Deal, and it was Roosevelt’s New Deal that gave Americans suffering during the depression hope.

The Great Depression started in 1929, and by most estimates ended in 1943 before the start of America’s entrance into World War II. This was a time of significant hardship on the citizens of this country. Unemployment stood at twenty- five percent. People lost their homes and their life savings. Some were forced to live in cardboard boxes,on the streets, that were affectionately called Hoover Ville’s. They kept warm by using Hoover blankets, which were newspapers. The Great Depression came after an economic boom in the 1920’s. This era was known as the roaring 20’s in which there was an explosion of Auto Industry jobs. One out of ten jobs were tied to the Auto Industry. Also, the Federal Government enacted The Federal Highway Act in 1921. This legislation was responsible for paving roads for Automobile’s. In 1914 there were two and a half million cars in The United States. In contrast, 1929 that number grew to thirty million cars. Two thirds of those cars were bought on credit. From 1921 to 1929 the Gross Domestic product went from 55 billion dollars to 103 billion dollars. Also, the average per capita income rose from six hundred forty-seven dollars to eight hundred forty-seven dollars. Manufacturing in The United States increased by sixty-six percent. There was a growth experienced in corporate America. Corporate America created twenty percent of all the wealth in America. And, from 1921-1926 a person making one million dollars or more received a two thirds tax cut. Corporate America was run by board of directors, and the personal touch, from the late nineteenth century was gone. So, was membership in the organized labor unions. Union membership went from five million in 1920 to three and a half million by 1930. One of the biggest reasons for this steep decline is that the biggest union, The AFL, focused on skilled workers. And, they did not organize by industry. In order to keep their workers from organizing into unions, corporate america engaged in an activity that was named welfare capitalism. This was an activity that corporate america engaged in to make their employees feel satisfied and not join a Union. Employers would pay decent wages, contributed to pension plans, organize athletic events and coordinate Christmas parties. The unemployment rate in 1929 was three percent. The economy was booming, But everything changed on October 29, 1929. It was a Tuesday that is forever known as Black Tuesday. It was the day that the stock market crashed and started a chain of events that sent the world into the great depression. Nine million americans were laid off, lost money, and consumer demand dried up. Nine thousand banks failed This was significant, because three years prior to the stock market crash of 1929 eighty-three percent of economic growth came from Wall Street. Also, seventy-five percent of all stock was purchased on credit. When a bank failed the depositors lost their money, due to the fact that there was no FDIC at the time. To Herbert Hoover’s credit, he engaged the economy more than any other President before him. One of the hardest hit during the depression were farmers. Hoover, in 1930, enacted the Hawley-Smoot Tariff whereby raising fees on imported agricultural goods, but this didn’t work because other countries put tariffs on American exports. In 1931, Hoover established The Presidents Organization for Unemployed Relief, a public works project pumping four hundred twenty-three million dollars into the States. Two of the most controversial projects of the Hoover Administration that made Hoover appear to be out of touch was The Reconstruction Finance Corporation. Giving one and a half billion dollars in loans to struggling institutions. The most controversial happened in 1931, whereby Hoover asked Congress for a tax hike. Furthermore, in another move that made Hoover appear out of touch with Americans he called in the military to deal with twenty thousand World War I veterans out of Washington, who were demanding early payments of guaranteed one thousand dollar bonuses. This was ironic, because one year earlier he forgave Germany and Britain’s debt for World War I, due to banks. Despite all of Hoover’s efforts, and his overwhelming landslide election four years previously, his failure gave rise to the landslide election of Franklin Delano Roosevelt in 1932. This put an end to the thirty year reign of Republican’s and ushered in the era of the Modern Presidency.