The New Deal

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History coursework Assignment two

Luke Sanderson

  1. In 1933, the new president of America, Franklin D Roosevelt, introduced The New Deal. He did this because of America’s economic depression at the time.

For example, many banks went bankrupt in the Wall Street Crash. This happened because, during the economic many people got involved in the stock market, especially in speculation. This was where you would buy lots of stocks with a loan, then way for them to rise slightly, and sell them off again, making a quick and easy profit. Many banks got involved in speculation, but people started to lose faith in the stock market, so everyone started to sell their shares. This meant that there were much more sellers than buyers which meant the whole system crashed. This caused banks to go bankrupt, along with everyone’s money that were in those banks. This caused people to withdraw their savings from banks, causing even more to close down.

Also there was the weakness of the US economy. After the boom, there was a strain on the consumer goods being bought, and other such things.

The companies that sold cars and other luxuries were now producing more than they could sell, and the majority of the American population could not afford to buy them.

Companies used huge amounts of advertising, but there was no demand for their products, as people’s wages were still low, and prices were still high.

Normally, America would have exported its surplus to Europe, but because American prices were so high, people in Europe could not afford them either. Also, Europe had put up its own trade tariffs to protect its companies from the American companies.

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The weaknesses began to show in 1929, when for the first time in four years, industrial output fell. This is what caused people to lose faith in the stock market.

Another reason for Roosevelt to introduce the new deal was because of the human cost of the economic depression. Farmers were hit worst by it, most of the farmers were unable to pay of their mortgages, and so banks came to seize their homes. Many farmers were forced to give up their work, and their homes, and had no option but to go and live on the road, trying to ...

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