The Great Depression began with the stock market crash of October 1929. By the presidential election of 1932, incumbent president Herbert Hoover and challenger Franklin Delano Roosevelt offered differing plans about how to deal with this tragedy, which by early 1933 had put American unemployment figures at about 15 million and had caused the closure of almost half of the banks in the nation.
At first, President Hoover assured the American people that the crisis would resolve itself on its own, but the situation became increasingly worse. The squalid shanty towns that sprang up around the nation became known derisively as Hoovervilles. Hoover finally attempted several solutions to the problems, but they were too little too late, and in some cases, they made the situation worse. For instance, Hoover's administration reduced taxes, convinced employers not to lay off workers, enacted a program of public works spending, and lent federal money to bail out banks. Hoover also pushed for a moratorium on international debt and signed the controversial Smoot-Hawley Tariff, which raised prices on goods imported from foreign countries. Most economists agree that this tariff act greatly contributed to the economic devastation caused by the Great Depression.
When FDR assumed the presidency, in early 1933, he immediately began to implement his own plan, known as the New Deal, to fix the Great Depression. He closed down the banks for a four-day holiday during which Congress passed reform legislation, and only banks that were stable were allowed to reopen. He fought for legislation to create economic reform programs, such as the Federal Deposit Insurance Corporation, which protected bank deposits, and the Securities and Exchange Commission, which regulated the stock market. The Works Progress Administration and the Civilian Conservation Corps provided jobs for millions of people, and the Tennessee Valley Authority aided the impoverished Tennessee Valley by providing electricity to the area and many more jobs. The Social Security Act gave a measure of protection to Americans in their old age. These are examples of some of the many steps that FDR took to combat the Great Depression. Through the implementation of all these measures, the economy began to show signs of steady improvement.