Sunday, April 12, 2009

The Effects of the Great Depression (4)

Conditions in the Nation continued to deteriorate, as Franklin Delano Roosevelt was sworn into office on March 4, 1933 as President. In his inaugural address he stated to millions of listeners "let me assert my firm belief that the only thing we have to fear is fear itself__nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance." On June 16 the Banking Act of 1933 (The Glass-Steagall Act) was passed, setting up the Federal Deposit Insurance Corporation (FDIC) which guaranteed individual accounts in banks up to $5,000.

In 1933 the "total mortgage debt of the nation had been estimated as high as 250,000,000,000. (2)

By 1934 economic conditions began to improve. About 2,500,000 of the unemployed found jobs, with a slight improvement in wages. There were still 11,000,000 that needed work and circa 16,000 and 18,000 on the relief rolls.. Industrial production began increasing slowly. Also on January 8, 1934 the U.S. Supreme Court upholds by a 5-to-4 decision a Minnesota law that temporarily bans the foreclosure of mortgages. On January 3o, 1934 the Gold Reserve Act gave the President the right to peg the value of the dollar, in relation to gold, at between 50 to 60 cents, and to change the value from time to time as he saw fit. The President immediately devalued the dollar to 59.06 cents. Also on January 31, 1934 the Federal Farm Mortgage Corporation was established to further alleviate the credit problems of farms by providing refinancing of farm debts at favorable terms. Gold worth $100,000,000 arrived on February 16, 1934 at New York City, attracted by the devaluation of the dollar at the end of January. In an attempt further to limit abuses in the financial community, the Securities and exchange commission (SEC) was established on June 6, 1934 to regulate the stock market.(1)

To be continued: The Effects of the Great Depression (5)

1) _________The Bicentennial Almanac; edited by Calvin D. Linton Ph.D; Thomas Nelson Inc. (1975)

2) Dumond, Dwight Lowell; "America in Our Time" 1896-1946; Henry Holt and Company (1937)

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