VII Great Depression and New Deal

The Great Depression

Although Americans enjoyed prosperity during the 1920's, the nation's economy was slowing down as a result of overproduction, reduced purchasing power, and government policies on taxes and tariffs（政府向进出口商品所征收的关税）. The weakened economy could not sustain the stock market boom, and the market crashed in the fall of 1929.

The stock market crash was the beginning of the Great Depression, the worst and longest economic decline in the history of the United States, lasting from the end of 1929 until the early 1940s. Unemployment, low wages, and the collapse of farm prices resulted hard times for millions of Americans. Countless factories got bankrupt and closed down. Many farmers lost their farms because they had no money. A large number of unemployed workers wandered all over the country looking for jobs. People stopped spending money. Demand for durable goods and luxuries declined, and production faltered. By 1932 the gross national product had been cut by almost one-third. By 1933 over 5,000 banks had failed, and more than 85,000 businesses had gone under（破产）, more than 15 million Americans—one-quarter of the nation's workforce—were unemployed. The whole country was in the economic collapse.

President Roosevelt and His“New Deal”

President Hoover, following his personal and political beliefs concerning the role of government, took limited steps to improve the nation's economy. In 1932 the American people elected a new President, Democrat Franklin D. Roosevelt, who promised action to help victims of the Great Depression. President Roosevelt set to work immediately after taking office. Declaring in his inaugural speech that“the only thing we have to fear is fear itself, ”Roosevelt quickly lifted the nation's spirits. He attacked the Great Depression and presented an unprecedented number of new government programs called the New Deal, which aimed to restore the nation's economy, reduce unemployment, assist businesses and agriculture, regulate banking and the stock market, and provide security for the needy, elderly, and disabled. Under the New Deal, the federal government became involved in direct public relief for the first time.

The New Deal had a strong influence on American life and culture. It was based on the concept that the government was responsible for the healthy development of national economy and social security, and that the growth of production could be maintained only if the great body of the consumers could continue to purchase its output. The New Deal increased government interference in the nation's economic life. As a result of Roosevelt's New Deal, the responsibilities of the federal government for economic and social welfare increased to new level.