Mortgages and rent payments could not be met, so people were moving into ‘Hoovervilles’. These were ‘shanty towns’, nicknamed after Herbert Hoover, who was president at the time of the Wall Street crash. Even people who had expensive cars, etc, before now had nothing, some were even unable to pay for a bus fare.
People with jobs and profitable companies even lost out because 5,000 banks went bust and the financial system virtually collapsed.
Farmers suffered greatly, thousands of families who farmed had to sell their farms as it became uneconomical to grow crops. Millions of farmers went to live in the big cities hunting for work.
The value of America’s foreign trade dropped from $9 billion to $3 billion, as other countries retaliated against US import tariffs. One result of this meant that share values changed dramatically, for example, the shares of the union cigar fell from $113 each, to just $4 each.
People blamed the depression on Hoover, as he and the government believed in “Laissez-Faire”, which meant that the government took a back seat, did not interfere, and let the economy and companies etc, run with no government help. A famous quote from Hoover is; ‘prosperity is just around the corner’. This shows that he wasn’t going to interfere with anything and just let things run themselves.
When Roosevelt won the 1932 presidential election, he promised the ‘New Deal’, and famously quoted that he wants ‘action and action now’. The ‘New Deal’ was to bring into practice, the ‘3r`s’ he promised, relief, recovery, and reform.
Roosevelt wanted to restore confidence in the nation and famously said,
“The only thing we should fear is fear itself”. He wanted the country to have no fear and be confident. He believed hat this would be the key to success.
Roosevelt wanted to start increasing government intervention and wanted an ‘active government’. His main aims were to end the depression, end poverty and unemployment, restore faith and confidence into all aspects of life, he wanted America to be restored as a world power again, people needed relief so he wanted to help them, Roosevelt also decided to improve trade and start exporting goods again. In his first 100 days of presidency, he closed lots of banks, (around 5,000) and helped them restart. He also introduced lots of ‘Alphabet Agencies’.
Doing all of these things would give relief to the people of America. The country would start to recover and get back on its feet, and by breaking the US tradition of ‘Laissez-Faire’ by having an active government; the country would be reformed back into a world power. Also, the role of the president would be greatly reformed.
