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The immediate challenge facing President Franklin Roosevelt when he took office in March of 1933 (in those days, the new president’s term started in March, not January as it does today) was the generally miserable economic situation. First, the unemployment rate was terribly high. Next, there was a general lack of confidence in the economy. This led to businesses being unwilling to hire or invest. There was, of course, a great deal of poverty in the United States at the time as well. This was something that needed (in some people’s minds) to be addressed by the federal government. It also added to the general pessimism about the economy.
Roosevelt, then, was faced by an absolutely horrible economic climate. This was his major challenge.
The most immediate challenge President Roosevelt encountered upon his inauguration on the 4th of March 1933 was the banking crisis in which the banking sector had undergone a meltdown leading to the closure of approximately 11,000 banks. Consequently, people lost their life savings overnight, causing widespread fear and panic among depositors who quickly rushed to salvage their funds by withdrawing from the banks. The banks depleted their reserves within a short time and could not even reimburse the depositors what they claimed. Businesses had to close down for lack of money to operate on and it is estimated that 25% of Americans lost their jobs, further worsening the economic situation.
The American populace had lost faith in the government and questioned its capacity to make sound economic and financial decisions. This was another challenge that Roosevelt had to battle with. He had to come up with a means of instilling lost confidence among the citizens. Other challenges include the farm crisis, national debt and the collapse of international trade, all of which resulted from the Depression.
Even though the social, political and economic situation was desperate, President Roosevelt through his New Deal proposed policies and strategies that would resuscitate the American economy whilst protecting the citizens from adverse effects such as those experienced during the depression.
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