Roosevelt Battles Depression
As the people rallied from the initial shock and began seeking explanations, they noted unhealthy trends that had gone unobserved beneath the prosperous facade of the 1920s. The core of the problem had been the immense disparity between the country's productive power and the American people's ability to consume. Great innovations in productive techniques during and after the war raised the output of American industry beyond the purchasing capacity of American farmers and wage-earners. The savings of the wealthy and middle classes, increasing far beyond the possibilities of sound investment, had been drawn into frantic speculation in stocks or real estate. The stock market collapse, therefore, had been merely the first of several detonations in which a flimsy structure of speculation had been leveled to the ground.
The presidential campaign of 1932 was chiefly a debate over the causes and possible remedies of the great depression. Herbert Hoover, unlucky in entering the White House only eight months before the stock market crash, had struggled tirelessly to set the wheels of industry in motion again, but constrained by a traditional conception of the federal government's proper role, he could take no drastic action. His Democratic opponent, Franklin D. Roosevelt, already popular as governor of New York state during the developing crisis, argued that the depression stemmed from the American economy's underlying flaws, which had been aggravated by Republican policies during the 1920s. President Hoover replied that the American economy was fundamentally sound but had been shaken by the repercussions of a worldwide depression, whose causes could be traced back to the world war. Behind this argument lay a clear implication: Hoover preferred largely to depend on natural processes of recovery, while Roosevelt was prepared to use the federal government's authority for bold experimental remedies. The election resulted in a smashing victory for Roosevelt, who won 22,800,000 votes to Hoover's 15,700,000.