Explain why Roosevelt introduced the new deal

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Explain why Roosevelt introduced the new deal

F.D Roosevelt introduced the new deal to solve the problems arising from the Wall Street Crash and the great depression. These problems were the collapse of the stock market, mass un employment and the collapse of the banks, the social effects of unemployment, the farming depression and the dust bowl.

The great depression lasted throughout the 1930’s, disaster struck first for the stock market in October 1929. The professional dealers in shares always knew the stock market would not rise up forever. Some share holders began to sell in the October believing prices were at their peek yet soon by the 21st; the prices began to plunge, leading to the Wall Street Crash on the 24th of October.

Businesses had been making a lot of money due to America expanding, surfaced roads increased from 620,000 to 1,000,000. Numbers of electronics such as televisions, tripled. More people were buying shares because American businesses seemed so profitable. The cause of this stock collapse, i.e. the Wall Street Crash, were the companies were manufacturing more goods than people had money to buy even if it was on credit and share holders were using borrowed money to buy shares. The American stock brokers increased their borrowed money by three which the share buyers were then forced to up their share prices with the money they didn’t have. By Tuesday the 29th of October the U.S stock market had collapsed completely, 16 million shares had been traded and now hardly anyone wanted to buy shares and most of them were sold at very low prices.

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This crash soon evolved, causing serious mass unemployment. The crash had made people panicky, made them uncertain about their future. So many decided to save any money they had instead of buying everything which they once did. Because no one was buying anything, the factories were making more goods than they could sell, so factory owners cut out production and laid off workers. The stocks had dropped which left the Americans penniless therefore the demands to buy goods collapsed, and the businesses were not bringing in employment for that reason increasing unemployment.

Money seemed almost non-existent, leading ...

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