The economic depression that plagued the United States in the 1930s was unique in its importance and its consequences. At the worst of the depression, in 1933, one American worker in every four was out of a job. The great industrial slump continued throughout the 1930s, shaking the foundations of Western industries and the society based upon it. Despite the seeming business prosperity of the 1920s, however, there were serious economic weak spots, a major one being a depression in the agricultural sector. Farmers were plagued with the dust bowl and many were forced to sell there farms. The key reasons for the dust bowl were improper use of the soil, they did not rotate there crops, and the series of drought. Although these simple for farmers had much to do with the depression it was not solely there fault.
Throughout the 1900s, U. S. banks used the stock market to make money and even though federal banks were banded from lending money out to be used on the stock market, nothing was stopping private banks from doing this which lead to easy credit. If every and anyone could go to the bank and get a loan then of course everyone would. People also inflated the stock market creating cheap money. If you had
Technology had eliminated more industrial jobs than it had created; the supply of goods continued to exceed demand; the world market system was basically unsound. The high tariffs of the Smoot-Hawley Act (1930) intensified the downturn. As business failures increased and unemployment soared--and as people with decreasing incomes nonetheless had to pay their creditors--it was apparent that the United States was in the grip of economic breakdown. The deepening depression essentially coincided with the term in office of President Herbert Hoover. President Hoover opposed government intervention to ease the mounting economic distress. His one major action, creation (1932) of the Reconstruction Finance Corporation (RFC) to lend money to ailing corporations, was seen as inadequate. Hoover lost the 1932 election to Franklin D. Roosevelt. Roosevelt was seen as a last hope to the people.
The depression brought a deflation not only of incomes but of hope. Though president Roosevelt’s New Dealfought with economic problems throughout his first two terms, it had no consistent policy. At first Roosevelt tried to stimulate the economy through the NATIONAL RECOVERY ADMINISTRATION, charged with establishing minimum wages and codes of fair competition in every industr
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