The Wall Street Crash of 1929 marked the start of the great depression which hit America and much of the industrialised world during the 1930’s. The cycle of prosperity turned into a spiral of depression as consumer spending fell by almost half, unemployment rose to over 12 million and there was widespread poverty and homelessness. The Hoover government’s ‘rugged individualism’ meant that people did not receive any relief from the federal government and led to a loss in support for Hoover as people blamed him for their problems. After his landslide victory in 1932, President Roosevelt vowed that through his reforms and economic policies, America would return to the road of prosperity. In 1933 he set out the ‘New Deal’ which sought to deliver relief, recovery, and reform. It could be argued that although the New Deal was effective in certain aspects such as short term relief, it did not end the depression; rather the war was the decisive factor.
During the first Hundred Days, Congress passed immediate relief measures for the American people that Hoover had failed to provide. The Federal Emergency Relief Administration, for example, provided millions of Americans with enough money to make ends meet. The Civil Works Administration put four million unemployed people to work. Roosevelt encouraged the creation of the Agricultural Adjustment Administration to assist farmers. The AAA temporarily reset prices for farm commodities and then began subsidising farmers to reduce production. Before the depression, many debt-ridden farmers had increased crop production in order to earn more money. Ironically, this led to overproduction, which flooded the market and drove prices down, forcing farmers to plant even more in a never ending cycle of production. The AAA, however, began paying farmers to destroy their surplus crops in order to raise prices, shown by (Source YY). This controversial act enraged poor and hungry Americans; how could the government pay farmers to destroy crops to inflate prices when others were starving? It was a controversial act that did not, however, end the depression.
Congress also created the Tennessee Valley Authority, whose goal it was to modernise and reduce unemployment in the Tennessee River Valley, one of the poorest and hardest-hit regions in the country. The agency hired local workers to construct a series of dams and hydroelectric power plants, which brought cheap electricity to thousands of people (Source 4 p. 219 Walsh). Public corporation also created affordable employee housing, manufactured cheap fertilizer, and drained thousands of acres of farmland. However, the TVA for all its positives did not end the depression as a whole as it only affected one part of the country.
The NRA and PWA (Source FF) kept millions alive as well as improving infrastructure. The president’s optimism and can-do attitude, combined with the success of his immediate relief programs, inspired confidence during his first term.