Why was there a need for a New Deal in America in 1932?

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Anna Hunston

Why was there a need for a New Deal for America in 1932?

Introduction:

In 1932 a New Deal was needed in America as, after three years of Great Depression, the USA was at rock bottom.  Herbert Hoover, a Republican, had been the president throughout the depression, voted in in 1928, however in the 1932 elections he was beaten by Franklyn Delano Roosevelt, a Democrat, in a landslide victory. Roosevelt won 42 out of the 48 states and gained seven million more votes than Hoover. This clearly shows that the electorate were fed up with Hoover as he had done “Too little, too late”, most likely because of the republican beliefs he held, such as no government interference in people’s lives. However Roosevelt promised the people “Action and action now”. By 1932, three years into the Great Depression and its effects, there were many economic and social effects being felt all over America such as 12million unemployed and a huge increase in suicide rate. This depression was a stark contrast to the economic boom that America had enjoyed in the 1920s.

Causes of the economic boom:

An economic boom is when an economy grows and increases in value in a fairly short period of time. There were several causes for the American boom in the 1920s however some are more important than others. I think that the most important cause of the boom was World War one. During the war the trade between America and Europe had been very one way. Europe, preoccupied with the war, were unable to generate their own food, raw materials and munitions. Because of this demand from Europe money poured into the USA, causing their economy to become the biggest and strongest in the world. I think this was the most important cause because if the foreign market hadn’t been so large mass production wouldn’t have happened and it was the war that prompted the development of new technologies and industries. The war had also led to advances in technology which the USA pioneered if the war had never happened other countries may have had the time, and money, to develop these technologies meaning that America would not have had a monopoly on the sale of advanced technology from which their economy did well. Other causes of the boom were: advances in technology; new industries, causing demand for products, this allowed manufacturers of these new goods to profit enormously; the introduction of credit and buying on the margin; the increased interest in the stock market meant that prices of shares rose generating huge profits for businesses and mass marketing, meaning companies were spending more on advertising and people were being encouraged to spend more than they had before. All theses causes are interlinked. WWI led to the advances in new technology and therefore new industries which the USA pioneered leading to them having a huge foreign market which led to mass production of goods. This helped to boost the economy. However even though the Americans were encouraged to spend, spend, spend there were many underlying problems.

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Causes of the Wall Street crash and Great Depression:

During October 1929 the American stock market, on Wall Street, crashed. There were several causes of the crash some of them long term and others short term. I think that the most important cause of the crash was the overproduction of goods. During the 1920s the US industry had become more efficient and cheap and due to the introduction of many new, luxury goods such as fridges sales, and profits, went up. The problem with this was that these goods were the type of things that ...

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