When the stock market crashed, our economy went into a depression. At first, the government did very little. President Hoover believed in a laissez-faire philosophy. This meant Hoover believed the government should interfere as little as possible in the economy. For two years, Hoover took little action. However, in his last year in office, Hoover tried to bring the economy out of the depression. The National Credit Corporation was established to help troubled banks make loans. The Reconstruction Finance Corporation was created to provide loans to businesses. The Emergency Relief and Construction Act provided direct relief to people. However, people felt President Hoover didn’t do enough, and he lost the election in 1932 to Franklin D. Roosevelt.
When President Roosevelt took office, he launched many programs to try to help bring the economy out of the depression. There were new rules for the stock market, and many government programs created jobs. Banks were closed for four days, and only the strongest ones financially were allowed to reopen. Over 15 major programs were passed in Roosevelt’s first 100 days in office. These actions were part of the New Deal program.
Thus, after a very slow response, the government eventually took action in trying to respond to the crash of the stock market.