Franklin Delano Roosevelt, a Democrat, came from a wealthy New York family and was educated at Harvard University. He entered politics in 1910 and elected Governor of New York State in 1928 after surviving a bout of polio.
The Democrats choose Roosevelt as their candidate to oppose Hoover in the 1932 Presidential Election. During the campaign he said, “I pledge you, I pledge myself, to a New Deal for the American people”. He promised to use government money and power to rebuild the economy.
Roosevelt won with a landslide victory. One of the main reasons for this was that the previous President, Hoover, had not controlled, or attempts to help the economic downfall of the United States. Hoover thought matters would right themselves and therefore took little action. In 1932 Hoover did eventually find some money to help a number of struggling banks and businesses, but he refused to set up federal relief programmes to aid the unemployed. As the Depression dragged on, a protest movement developed among the hungry and the unemployed. Many Americans had lost confidence in President Hoover and were looking for new leadership that arrived in the form of Roosevelt.
Before Hoover took over Presidency, Calvin Coolidge had been in office, during which time he had said, “the business of America is business”.
In the late 20s, industry in general was entering a boom period with entertainments and luxuries becoming a mainstay for the American people. Cars became extremely popular, and the combined effect of isolationism and strict immigration meant that America could focus on itself and became extremely prosperous.
Rather than interfere with the high import taxes and government help for industry, the Presidents who were in power during the 1920s preferred to leave American business to look after itself. Trade union membership declined rapidly, as work was available for most people and people had money to spare. With many new things for people to spend money on such as the cinema, household appliances, and international fashions, the American people as a whole enjoyed the happy-go-lucky atmosphere of an affluent country.
Herbert Hoover, an orphan from the age of eight, led a rather rough childhood and worked in connection with the mines until he retired at forty; a millionaire. He was a tireless worker, often doing ten hours a day, seven days a week in the years before he became mining engineer and travelled the world. When he successfully stood for President in November 1928, he declared: “We in America are nearer the final triumph over poverty than ever before in the history of mankind”.
Although outwardly, America’s financial situation looked firm, it was built on seriously deficient foundations: people were purchasing goods on credit and most were dependent on the rise of share prices for their income. It was not uncommon for a loan to be taken out, used to buy shares at a low price, sold at a high price, and the profit used to pay back the loan. By 1929, it was clear that American industry was making goods faster than it could sell them and that profits were falling.
Cautious people began to sell shares, and as panic spread, people realised that shares were only worth a lot if they could be sold to somebody else. Unfortunately, on the 24th of October, 1929 the stock market crashed. Thirteen million shares were sold on the Wall Street Stock Exchange, and prices of shares suddenly fell. And so, after just six prosperous months in office, Hoover was faced with the biggest economic slump in the history of the United States.
After the crash, millions of shareholders lost money and banks recalled their loans, only to find that this was not possible. Overnight, many thousands of people became financially ruined. The American banking system was weak due to the large numbers of small, independent banks, so when large numbers of people tried to withdraw their savings at the same time, a lot of banks were forced to declare themselves bankrupt. After this happened, ordinary people with savings lost everything, regardless of whether they had ever bought shares. In this way, the Wall Street Crash affected many areas of society, all over the country.
After the crash neither Hoover nor any of the government officials tried to give an explanation as to why the economy was allowed to get out of hand, or why the largest earners were concentrated to a very small minority of people. No inquiries were made as to why so many banks were as unstable as that 1616 closed in just a few days.
Hoover’s ‘stone-cold’ attitude to his people was probably one of the deciding factors in the loss of the 1932 elections. On no occasion did he attempt to make a rallying speech or organise a sufficient amount of money to be helpful. His ‘hands-off’ approach meant that he only gave advice to businesses and that no direct orders were given until too late.
To compare, 1.6 million people (3%) were unemployed in 1920, rising to 4.3 million (9%) just after the crash and skyrocketing to 12 million (24%) in the year Roosevelt took over.
In some cities such as Chicago, 40% of the workers were unemployed, and due to racism and the Ku Klux Klan being prominent, unemployment among black workers was as high as 70% in some areas.
As industry was scaled down in order to stay profitable with the reduced demand, a vicious circle of workers being laid off => unemployed having less money, and so buying less, leading to => reduced demand for goods led America quickly into a deep depression. Quick action by Hoover at this point could have averted the drawn out suffering many Americans experienced and also saved his political career.
Without social security, the economy ground to a halt. But Hoover would still not take action against the rut that the people of America had found themselves in, instead believing that matters would right themselves. He encouraged people to take a stance of ‘rugged-individualism’ that involved working themselves out of poverty; but with no work, this proved impossible.
As the months passed, the depression grew deeper, and workers found themselves unable to pay rent or to repay mortgages, or even to buy food. In the 1920s governments had done little to look after the small minority of poor and unemployed. Now the numbers needing help had increased dramatically and there was no proper system to cope with the results of unemployment.
In 1932 Hoover did eventually find some money to help a number of struggling banks and businesses, but he refused to set up federal relief programs to aid the unemployed. He insisted that this was the job of private charities and local state governments leaving the workers to rely on charity from the churches and relief organisations.
Cities changed in a relatively short space of time from being well cared for streets, full of life and money, to places where beggars were found at every street corner and people wandered aimlessly, selling small items just so they could eat. Parks were converted into ‘Hoovervilles’ where families who had been thrown out of their homes built makeshift shacks of cardboard, corrugated iron, packing cases and other refuse that happened to be lying around. In an attempt of escape, countless numbers of city people moved to the countryside. Even then, work and food was not assured as farmers had been hit harder by the crash than the people in the cities due to their smaller savings and the disadvantage of not actually benefiting from the boom. Hundred of small farmers packed up and moved about the states looking for what little labouring work they could find.
Hoover seemed to be unconcerned about the worsening situation and as the depression dragged on, a protest movement developed among the hungry and the unemployed. Many Americans had lost confidence in President Hoover and were now looking for new leadership.
The ‘American dream’ had been shattered and an increasing number of people turned to violence to see if they could catch the attention of the government to make them help people in the same predicament.
Hoover believed that American business had produced the boom without interference from the government. He also believed that leaving it alone again would solve the depression.
During 1930 and 1931 Hoover did little to help as things grew worse and worse. The situation was getting out of hand, and new approach was required.
The new approach came in the form of Franklin Delano Roosevelt. Roosevelt came from a rich family and had a background of good schooling, studying at Harvard University and working as a lawyer. He and his wife Eleanor shared their concern for the lives of ordinary people and, at the start of his political career as a Senator in New York he built up a good reputation for being generous to those less fortunate.
Success had come easily to Roosevelt, but in 1921, a severe bout of polio meant that he lost almost all of the use of his limbs. He fought the illness and, by exercising, he had regained use of his arms and back. While fighting the illness, Roosevelt gained an affinity for the suffering and had a chance to read and develop ideas.
In 1924 Roosevelt returned to politics, and in 1928 was elected for Governor of New York. Soon after his election came the Wall Street crash and he insisted that governments should do something about those in need. Roosevelt helped get $20 million to be spent on schemes to provide work. This was in sharp contrast to the work that Hoover was doing and attracted a lot of attention.
In a speech made to the public he said “Remember the forgotten man”. This was one of the most poignant sayings that Roosevelt said on his campaign and it showed that Roosevelt saw that the gap between the rich and poor was very large: the top 5% of Americans earned one-third of all income.
Speaking in Chicago before he was elected, Roosevelt talked about a ‘New Deal’; “I pledge you, I pledge myself, to a New Deal for the American people”. Roosevelt’s phrase “a New Deal” caught the imagination of the American people and its was an inspiring response to the depression showing true compassion through his actions.
In 1932 he was chosen to stand for President against Hoover and won with a landslide victory in the elections. He received a massive 22 million votes and the biggest percentage of states supporting him in the history of the elections.