Roosevelt’s new deal in the Great Depression.doc

Roosevelt’s new deal in the Great Depression Taylor Class2 120110202 Introduction: The Great Depression was one of the worst time periods in American history. The New Deal introduced by President Roosevelt played a significant role in that time and helped Americans overcome the depression. The Great Depression began with the Wall Street Crash of October, 1929 and rapidly spread. The market crash marked the beginning of a decade of high unemployment, poverty, low profits, deflation, plunging farm incomes, and lost opportunities for economic growth and personal advancement. Three years into the depression, Herbert Hoover lost the 1932 presidential election to Franklin Delano Roosevelt in a sweeping landslide. After then, a series of economic programs were enacted in the United States, which is known as the New Deal. The New Deal focused on what historians call the 3 Rs: Relief, Recovery, and Reform. That is, Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression. The economic programs mainly involved the followings. The first is banking reform. Roosevelt sent to Congress the Emergency Banking Act, which provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in hoarded currency and gold flowed back into them within a month, thus stabilizing the banking system. The second is monetary reform. The government suspended the gold standard. The dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold. It enabled the Fed to increase the amount of money in circulation to the level the economy needed. The third is security regulation. To avoid another Wall Street Crash the Securities Act of 1933 was enacted. It required the disclosure of the balance sheet, profit and loss sta