During the 1930's, the major effect of the Great Depression resulted in the New Deal. America expanded government intervention into new areas of social and economic affairs as well as the creation of more social assistance agencies at the national level. Both Herbert Hoover and Franklin D Roosevelt envisioned different roles the government should play. Hoover argued for laissez faire system in which the government did not intervene or give direct aid to those in need while Roosevelt argued for a new deal. Nonetheless, the relationship between the national government and the people changed drastically. The government took on a greater role in the everyday social and economic lives of the people. .
The stock market crashed on Thursday, October 24, 1929, less than eight months into Herbert Hoover's presidency. As the Depression became worse, calls grew for increased federal intervention and spending due to the rise of the unemployed and drop of income, tax revenue, profits and prices as well as international trade. Hoover however, refused to involve the federal government in forcing fixed prices, controlling businesses, or manipulating the value of the currency. He refused to use federal money as a direct aid to citizens as he believed that it would weaken public morale. He wanted citizens to be able to help themselves without relying on the government. He believed that the "maintenance of equality of opportunity" was what set American individualism apart from European individualism. Hoover feared that if citizens were to become reliant, they would lack motivation, resulting in a hindered advancement in the long run. Hoover tried to convince Americans that the measures they were calling for might seem to help in the short term, but would be ruinous in the long run. He asserted that he cared for common Americans too much to destroy the country's foundations with deficits and socialist institutions.