Explain why Roosevelt introduced the New Deal

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Peter Hirsch

Explain why Roosevelt introduced the New Deal

In America 1929, after an economic boom, Wall Street ‘crashed’ and America fell into a depression.  It was due to over production; placing tariffs on foreign goods etc.  At the time, President Hoover did not do much to solve the depression as he was a republican.  He believed in ‘laissez faire’ which means ‘let do’ literally translated.  It basically means that the government doesn’t get involved in businesses, thus companies make more profit, meaning businesses and shops can give higher wages and everyone gains from the prosperity.  What Hoover did do to help was often too little or too late.   In 1929 he had said ‘the poor man is vanishing from amongst us’, yet by 1932 14 million Americans were unemployed.  All of this made many Americans dislike him and many people lost trust in the government and he became known as one of the most hated presidents ever.  People started to believe he didn’t actually care.  At the 1932 elections, Hoover was voted out and Franklin Delano Roosevelt was voted in.  Immediately he started addressing the problems of the depression.  He called his new schemes the New Deal.

During the Depression thousands of Americans lost their jobs for many reasons; banks and businesses were shutting down because of a variety of reasons.  First of all, most business manufactured consumer goods that would only be bought once, such as fridges and cars.  When every one had bought one that wanted to, no products were being purchased so no more money was to be made.  Also, because so many people couldn’t afford to buy anything, businesses and shops were going bankrupt.  By 1932 14 million Americans were unemployed.  This was a big problem for America.  Many people were starving, and had no money to buy goods which affected the whole the economy.  Roosevelt set up the ‘Civilian Conservation Corps’ (CCC) as one of the ‘Alphabet Agencies’.  This allowed people to sign up for a period of 6 months and could be renewed if they still did not find work.  This gave jobs to 2,000,000 million young men and 8000 women.

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The Depression also made many banks collapse and go bankrupt.  This was because people so many people withdrew all their money very quickly, so the banks didn’t have enough money to carry on going.  In 1929, 659 banks went bankrupt.  A lot of public confidence was lost in the banks after these incidents.  Then in 1930 1352 banks went bankrupt, including the Bank of United States in New York where 400,000 immigrants and half of New York had their savings. If everyone had to keep their money at home it would be no good to the economy, then in ...

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