In October 1929 the booming stock market crashed, wiping out
many investors. The collapse did not in itself cause the Great
Depression, although it reflected excessively easy credit
policies that had allowed the market to get out of hand. It also
aggravated fragile economies in Europe that had relied heavily
on American loans. Over the next three years, an initial
American recession became part of a worldwide depression.
Business houses closed their doors, factories shut down, banks
failed with the loss of depositors' savings. Farm income fell
some 50 percent. By November 1932, approximately one of every
five American workers was unemployed.
The presidential campaign of 1932 was chiefly a debate over the
causes and possible remedies of the Great Depression. President
Herbert Hoover, unlucky in entering the White House only eight
months before the stock market crash, had tried harder than any
other president before him to deal with economic hard times. He
had attempted to organize business, had sped up public works
schedules, established the Reconstruction Finance Corporation to
support businesses and financial institutions, and had secured
from a reluctant Congress an agency to underwrite home
mortgages. Nonetheless, his efforts had little impact, and he
was a picture of defeat.
His Democratic opponent, Franklin D. Roosevelt, already popular
as the governor of New York during the developing crisis,
radiated infectious optimism. Prepared to use the federal
government's authority for even bolder experimental remedies, he
scored a smashing victory – receiving 22,800,000 popular votes
to Hoover's 15,700,000. The United States was about to enter a
new era of economic and political change.
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