How did the government react to the Great Depression?

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When looking at our government’s response to the Great Depression, we need to look at what President Hoover and President Roosevelt did. When the Great Depression began, the prevailing attitude of President Hoover was to take a laissez-faire approach. This meant the government would not do much to deal with the Great Depression. President Hoover worked with businesses to voluntarily do some things. Businesses initially agreed to keep factories open and to not cut wages. However, businesses weren’t able to do this over the long run. The depression became worse. Eventually, President Hoover had the government take direct action. The National Credit Corporation provided money to help troubled banks make loans. The Reconstruction Finance Corporation gave loans to banks, farmers, and railroads. The Emergency Relief and Construction Act provided help to those who were unemployed. However, these actions weren’t enough to end the Great Depression.

President Roosevelt believed from the beginning that the federal government must be actively involved. There were a series of programs developed to provide relief, recovery, and reform to our economy. There were several job creation programs that were developed. These included the Civilian Conservation Corps, the Civil Works Administration, and the Public Works Administration. Laws were passed to control the financial industry. The Securities Act and the Glass-Steagall Act regulated the financial industries. The National Industrial Recovery Act had businesses, workers, and the government working together to deal with the effects of the Great Depression. Codes of fair practices were established that workers and businesses agreed to follow. The Agricultural Adjustment Act was designed to help farmers. Farmers were paid not to grow crops.

President Hoover and President Roosevelt had very different views about how the government should deal with the impact of the Great Depression. President Hoover wanted a limited government role while President Roosevelt wanted a very active government role.

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