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The Great Depression Promptly at 10: 00 A. M. Thursday, October 24, 1929, the gong of the New York Stock Exchange sounded. Six thousand shares of Montgomery Ward sold for $ 83 a share.
The shares were down from $ 156. Stocks were plunging two to ten points between transactions. Panic was spreading, and soon the floor of the New York Stock Exchange was filled with milling, screaming human beings, their faces alabaster white with fear. The day would be known as Black Thursday, the day the bubble of American prosperity burst (Schraff 17).
The Great Depression occurred while Herbert Hoover who can be seen in Appendix 1 was the president of the United States. Hoover did many things to help the people, but Franklin Roosevelt with his brilliant ideas, was the person who returned the economy to normal. Information on this topic can be found in the library, by looking in an encyclopedia, magazine articles, and books. Hoover set up Federal Transient Camps for homeless people but Roosevelt's creation of the New Deal and The Second New Deal is what turned America back around. Herbert Hoover, shaken in the course of what had started out as a relatively placid Presidency, talked of recovery in optimistic terms. But less than a month after the stock market crash, he called together leaders of some of the most important industries in a confidential conference and asked their cooperation in combating the business slump.
To minimize unemployment, he requested them to spread available work and wages among as many workers as possible. Two weeks later, he asked labor leaders not to demand further wage increases. Both sides complied for about two years (Athearn 1176 - 77). By mid 1929 the unemployment rate was down to 12, 000, 000 people.
To help the unemployment, Hoover set up Hoovervilles, or Federal Transient Camps. People without a job or home lived in these camps. These camps were very beneficial to unemployed people because they did not have to live on the streets. During June of 1929 production of steel, automobiles, agricultural equipment and railroad traffic declined.
Hoover responded by proposing the establishment of a National Business Survey Commission to diagnose and suggest, but not to dictate, the future course of business. Hoover also warned Congress to cut spending at once (Klingaman 333). Also, the Smooth-Hawley Tariff was passed by Hoover after eighteen months of debate from Congress. Overall, the bill established the highest Tariff rates in American history: an average of 41 % ad Valorem on all dutiable commodities, and a full 20 % above the previous tariff passed in 1922 (333 - 4). This tariff hurt the veterans of World War I because they were to be paid a bonus for their services in 1917 - 8 in 1945.
Thousands of veterans moved to Washington and demanded immediate payment of the bonus. Even though Congress passed the demand, the Senate vetoed it. Since the prices were so high and the farmers could not sell their products. Hoover proposed a farm bloc program that was passed by Congress. The Federal Government erected a tariff wall to protect for the American farmers a minimum price for their crops (144).
Also, President Hoover tried to encourage farm cooperatives and strengthen farm credit through the Agricultural Marketing Act of 1929. This created the Federal Farm Board with $ 500 million. This money would be lent to groups of farmers so that they could market their products more efficiently, build warehouses, and hold farm products for higher prices. Unfortunately, the plan failed, and the situation on the farms worsened. Late in 1931, after an unsuccessful attempt to persuade private business interests to form an effective credit association, Hoover endorsed the creation of the Reconstruction Finance Corporation or RFC, which passed Congress in January 1932. The Reconstruction Finance Corporation would lend to banks, corporations, and agricultural groups.
Much farm surplus was released to the unemployed, and early in 1932, Hoover recommended $ 300 million in FRC loans to the states for relief (Graff 504). Franklin Roosevelt who can be seen in Appendix 2 is known for his New Deal. One of the programs of the New Deal was the National Recovery Act, or NRA. The NRA set up maximum work hours beyond which people were not allowed to work; moreover, a minimum wage was set up.
Paying below the minimum wage was illegal. All prices of items were set by the government. Also, government told every business how many products to produce. Membership in the NRA was voluntary, although great pressure was put upon those who didnt want to join. Those who did could display a placard bearing a Blue Eagle. Within four months of the Blue Eagles berth, Old Ironpantsas Johnson was called because of his stubbornness and determination claimed that 96 % of industry and commerce was under its wings (Athearn 1186).
On March 9, 1932, the Emergency Banking Relief Act was approved by Congress. The main goal of this act was to reopen the banks. In a speech by Roosevelt he told the people that it was safer to keep your money in the bank than in the houses. Within a few days, banks began to go back into business.
By March 16, 1932, three-quarters of the Federal Reserve banks were re-opened. Even the stock market came to life (1182 - 3). Finally, the National Youth Administration, or NYA, was created to keep high school and college students out of the labor force: 750, 000 students were able to earn $ 5 to $ 30 per month by remaining in school and working there as a typists, laboratory, and library assistants, and tutors (Schraff 82). The Banking Act of 1935, passed by Roosevelt, was very important to the federal government.
This Act gave the Federal Reserve Board the power to regulate interest rates. So, when the economy slowed down, the interest rates would be reduced and this would make borrowing easier. Since farm and home foreclosures had disrupted thousands of families, Roosevelt passed the Emergency Farm Mortgage Act, which authorized Federal Banks to pay for farm mortgages, and by establishing the Home Owners Loan Corporation to save the family home from foreclosure. Most important of all programs of Roosevelt was the Social Security Act, or SSA.
It provided for joint federal-state programs of unemployment compensation, financed by a federal tax on payrolls. It also created an exclusively Federal system of old age survivors insurance funded by a tax shared equally between employers and employees. It also created the potential for enormous demands on the public purse, diminished incentives for individuals to save, and reduced the sense of responsibility of families to care for their own elderly members (Graff 517). The Works Progress Administration, or WPA was a program by Roosevelt to create work for people. The average number of people employed by the WPA was two million. These people worked on projects such as building large airports, stone walls and universities.
All people had a chance; for instance, writers could write on history, surveys and studies; actors could put on plays to gain money for government. In May 1935, the Rural Electrification Administration was established to stretch power lines into rural areas that had none. WPA labor was used to give thousands of people the convenience of electricity. When Roosevelt took office there was also a problem with agriculture. He spent $ 3, 000, 000, 000 on farm aid and employed 6, 000, 000 farmers.
Even though he helped the farmers he is criticized that he spent too much on farmers. The lasting impact of the New Deal may be found in Social Security, and unemployment insurance, minimum wages and maximum hours, housing for low-income people and federally guaranteed savings account. These now permanent programs add immeasurably to the quality of life and peace of mind of just about every American (Schraff 93 - 4). Finally, Herbert Hoover did not do a lot about the Great Depression but through these programs: Federal Transient Camps, National Business Survey Commission, Smooth-Hawley Tariff, Agricultural Marketing Act and Reconstruction Finance Corporation he slowed down the effects of the Great Depression. The man who ended the Great Depression was Franklin Roosevelt. With programs such as the National Recovery Act, Emergency Banking Relief Act, National Youth Administration, Emergency Farm Mortgage Act, Social Security Act and Works Progress Administration he helped the farmers, unemployed and returned the economy back too normal.
In this paper I learned a lot about the Great Depression of 1929. I also learned about Herbert Hoover and Franklin Roosevelt, who were the presidents during the time of the Depression. I think that the Great Depression was a great disastrous event in the history of the United States of America. The unemployment rate was very high and people did not have a home to live in, which is very sad.
I think that Herbert Hoover did not do enough to help the people from the Depression. On the other hand, Roosevelt with his New Deal and Second New Deal ended the Depression. The books I read were very interesting to read. Also I could not find a lot of information on Herbert Hoover efforts in the Depression but on the other hand there was enormous information on Roosevelt's New Deal and Second New Deal.
I would recommend anybody to do a report on this topic.
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