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Roosevelt and the New Deal.

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Introduction

History Coursework - Roosevelt and the New Deal. A. In 1932, Roosevelt was elected as new president of USA. His idea of the 'new deal' was set up to get the American people out of depression and to get the economy back and running, using Relief, recovery and reform. To do this, Roosevelt felt it was up to the government to help. The immediate thing Roosevelt did was to set up a 4 day bank holiday. This therefore stopped people taking money out of the banks, which would have forced them into bankruptcy. A temporary banking act was set up by the government which lent money to keep banks open. Unreliable banks that were unlikely to stay open closed to gain public trust. Roosevelt placed emergency action, and by doing this wanted to show the public that he was trying to help. Roosevelt convinced the public to put their money back and have confidence in the banks. Roosevelt used the radio to tell the Americans what he was doing. He called these broadcasts 'fireside chats'. By using this term he hoped that Americans would think he was talking to them directly, addressing their individual problems. ...read more.

Middle

B. Roosevelt introduced the new deal when he came into power in March 1933 because the American economy was shattered due to the Wall Street Crash which led to the depression. The economic boom had huge effects on the public as they felt that buying shares from the stock market was an easy way to make profit. Both big and small businesses took interest and invested their spare money. In 1923, 266 million shares were sold, whereas in 1928, it rose to 1,125 million sold. Share prices became more than their real value. Prices were forced up because so many people wanted to purchase them. People were so confident with the stock market that shares were being bought without a doubt. In the late 1920s however, producers began having difficulty selling their goods, so the public began selling their shares before prices fell any lower. In October 1929, everybody wanted to sell shares, but no-one wanted to buy them. Share prices therefore fell dramatically. People, who had borrowed loans to buy shares, had to sell whatever they had left. On October 24th, 13 million shares were sold, however on 29th of October, 16 1/2 million had done so. ...read more.

Conclusion

The government's involvement was the agencies that they formed. He introduced the Securities act which forced companies to provide information to the public. Managers who did not follow this could have been prosecuted. In 1934, the Securities and Exchange Commissions gave the government power to control activities in the stock market. This gave investors confidence in rebuilding America's businesses. Roosevelt had to eliminate farmers over producing food, as this lead to low selling prices. Instead Roosevelt paid the farmers to not produce as much food. The AAA (Agriculture Adjustment Act) was set up to try and reduce production in the long run which therefore raised prices that they were to be sold at. Roosevelt helped the unemployed by setting up the CCC which provided jobs for unemployed young men. The pay was low but it carried out important projects such as fish farming and fighting forest fires. Its members planted 200 million trees which helped to reduce soil erosion. The CCC provided work for around 3 million men under the age of 25 years old. The creation of new jobs meant more people had more money. They would spend this money and so demand would increase. Consequently, businesses needed to employ more people and so even more people would have more money - demand would increase again. ...read more.

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