When he accepted the Democratic Party's nomination for the presidency in 1932, Franklin Roosevelt pledged "a new deal for the American people" (Atack, 1994, p. 625). When he assumed office, the American system of democratic capitalism faced a crisis of monumental proportions. Economic distress and social unrest were widespread. In 1929, Hoover's first year as president, the prosperity of the 1920s capsized. Stock prices climbed to unprecedented heights, as investors speculated in the stock market. The bender, in which people bought and sold stocks for higher and higher prices, was fueled by easy credit, which allowed purchasers to buy stock "on margin." If the price of the stock increased, the purchaser made money; if the price fell, the purchaser had to find the money elsewhere to pay off the loan. More and more investors poured money into stocks. Uncontrolled buying and selling fed an upward spiral that ended on October 24, 1929, when the stock market collapsed. The great crash shattered the economy. Fortunes vanished in days. Consumers stopped buying, businesses retrenched, banks cut off credit, and a downward twist commenced.
             The Great Depression lasted through the 1930s. Since the crash of '29, the value of common stocks had declined from $89 billion to $15 billion. Between 1929 and 1932 GNP dropped in constant 1928 dollars from billions $197.1 to $143. Real output fell 29 percent. Total gross investment fell from 15 percent of GNP to one percent. Consumption dropped by more than one third. Unemployment increased from 3.2 percent in 1929 to 21?25 percent in 1933(Picture 4). About 13 million Americans were officially out of work. Farm prices and
             farm income had appreciably fallen. On the eve of the March 1933 inauguration, the nation's banking system collapsed as millions of panicky depositors tried to withdraw savings that the banks had tied up in long-term loans. On that evening, Roosevelt declaring in his inaugu...