fdr, great depression, new deal

Great Depression overview

The deepest and longest economic downturn in American history, featuring 25% unemployment by 1932 (reaching 50% in some cities), global impact, 500,000 homes lost, and a transformational expansion of the federal government under FDR.

Primary causes of the Great Depression

The stock market crash (1929), overproduction/underconsumption, the Smoot-Hawley Tariff (which sparked global trade wars), Federal Reserve constricting the money supply, and a collapse of the banking system (9,000 banks failed by 1932).

Black Tuesday

October 29, 1929, the day of the major stock market crash where the market lost 40% of its value between October and March, triggering widespread panic, bank runs, and suicides.

Buying on margin

A 1920s stock market practice where investors paid a small amount down and borrowed the rest, fueling speculation

Overproduction and underconsumption

A key cause of the Depression where companies and farmers produced more goods than could be sold, causing prices to collapse

Smoot-Hawley Tariff (1930)

Signed by Hoover, it raised U.S. tariff rates as high as 50%, causing European countries to retaliate, which crippled international trade and deepened the global depression.

Human toll of the Great Depression

25% of Americans lacked adequate food/housing, 12 million were unemployed, malnutrition affected 1/4 of schoolchildren, homelessness and crime soared, and people lived in shantytowns called "Hoovervilles."

Hooverville

Makeshift villages named after President Hoover, where homeless Americans built shelters from scrap metal, wood, and newspaper, symbolizing the government's initial failure to address the crisis.

Impact on women and minorities

Women kept low-paying jobs (clerks, maids, teachers) but faced criticism for "taking men's jobs." African Americans and Mexican Americans were often first laid off

Dust Bowl

A severe drought in the Great Plains that destroyed topsoil, creating massive dust storms

Herbert Hoover's response to the Depression

Initially advocated for voluntary business cooperation and limited government, but reluctantly created the Reconstruction Finance Corporation (RFC) and signed the largest tax hike in history (Revenue Act of 1932).

Reconstruction Finance Corporation (RFC)

Hoover's reluctant 1932 program that provided federal loans to banks, insurance companies, and railroads, aiming to stabilize key industries but failing to trickle down to ordinary Americans.

Revenue Act of 1932

Hoover's response that raised the top income tax rate from 24% to 63%, the largest tax hike in history, which critics argued worsened the Depression by pulling money out of the economy.

Bonus Army incident (1932)

WWI veterans camped in Washington D.C. to demand early pension payments

FDR's personal qualities and philosophy

Stricken with polio, which increased his empathy

FDR's First 100 Days

A legendary period of legislative activity in 1933 where FDR pushed through numerous New Deal programs to provide relief, recovery, and reform, restoring public confidence.

First New Deal (1933-1935)

Focused on immediate relief and economic recovery through programs like the CCC, FERA, and banking reforms, establishing the foundation of the American welfare state.

Emergency Banking Act (1933)

Declared a 4-day "bank holiday" to prevent collapse, infused $2 million into the system, and took the U.S. off the gold standard to stabilize the banking system.

Glass-Steagall Banking Act (1933)

Established the FDIC (insuring deposits up to $2,500) and separated commercial banking from investment banking to prevent another stock market-fueled banking collapse.

Federal Deposit Insurance Corporation (FDIC)

Created by the Glass-Steagall Act to insure bank deposits, restoring public confidence and preventing future bank runs.

Securities and Exchange Commission (SEC)

Established by the Securities Exchange Act of 1934 to regulate stock and bond trading, requiring corporations to disclose financial information to investors.

21st Amendment

Ratified on December 5, 1933, it ended Prohibition by repealing the 18th Amendment, aiming to stimulate the economy and generate tax revenue from alcohol.

Federal Emergency Relief Administration (FERA)

Provided direct federal grants to states to help the unemployed and homeless, marking a shift from local to federal responsibility for relief.

Civil Works Administration (CWA)

A short-term program that employed 4 million workers to build roads, sewers, schools, and airports, providing immediate jobs and infrastructure.

Civilian Conservation Corps (CCC)

Employed nearly 3 million single men aged 17-27 over nine years

Home Owners Loan Corporation (HOLC)

Designed to prevent foreclosures by refinancing mortgages at lower interest rates, saving countless farms and homes from bank seizure.

FDR's Fireside Chats

A series of radio broadcasts where FDR directly explained his policies to the American people, building public confidence and demystifying complex government actions.

FDR's statement on fear

From his 1933 inaugural address: "The only thing we have to fear is fear itself," meant to rally a desperate public and inspire confidence in government action.