As America was entering a new decade, they faced the troubles of the Great Depression. Many people were afraid of spending the little money they had saved, even when item prices were dropping. Since 32,000 corporations went bankrupt and 5,500 banks closed, employees were unable to receive payment leading to one-quarter of the work force drastically increasing the unemployment rate (Great-Depression). America needed assistance from the government, but Herbert Hoover refused the idea of any federal relief but as the depression worsen, Hoover changed his mind and initiated farm assistance programs, and began to campaign for federal work projects to create jobs.
In hopes to finding a solution, Hoover also signed the Hawley-Smoot Tariff which scientifically raised the prices on imported goods, but the tariff made it worse.
Another not-so-good idea from Hoover was to have congress create the Federal Emergency Relief Administration was provided money to only large companies to help them out of bankruptcy. It only benefitted the bigger companies because they were the ones more likely to pay the government back.
The chance of Hoover being reelected ended when Congress wanted to help relief WWI veterans, known as the Bonus Expeditionary Force, by granting them early payments. The BEF demanded for their benefits in front of the White House were Hoover ordered the army to get rid of them, which they did using force. Hoover’s action led to Franklin D. Roosevelt to win the 1933 Presidential election. THIRD: With President Roosevelt in office, things began to move forward. Once in office, Roosevelt worked alongside with Congress to create his recovery plan, known as The First New Deal.
The New Deal established programs such as the Public Works Administration (PWA) which produced jobs manufacturing roads, sewers, etc. to get money back into the pockets of Americans. Roosevelts first main goal was to reestablish America’s trust in the banking system. He created the Emergency Banking Relief Act which made the Treasury Department care for badly managed banks. Roosevelt reassured Americans of the safety and secureness of the banks once again through his broadcasts. People had trust in Roosevelt, so they began to deposit their money back into the banks which helped many banks out of bankruptcy. His next objective was to assist the rural poor. Farmers began to overproduce because they had the ideology that if they produced more goods, it would help from the prices going down, but it made prices decrease more. Roosevelt created the Agricultural Adjustment Act (AAA) which paid farmers to stop overproducing. Also, with the creation of the Farm Credit Act, aid was provided to the farmers who were close to foreclosure. The First New Deal was successful in restoring economically and politically relief. Unemployment rate went down as wages grew.