The Great Depression and The New Deal

Installment Buying/Easy Credit

a consumer credit system allowing buyers to make a small down payments and pay the remainder over time, fueling the era’s mass-consumption economy and enabling middle-class consumers to purchase high-priced items like cars and appliances immediately.

Black Tuesday

On October 29th, 1929, the U.S. stock market crashed, marking the beginning of the Great Depression, leading to widespread financial panic, loss of savings, and a severe downturn in the economy that affected millions of Americans.

What were some of the underlying causes of the Great Depression?

the uneven distribution of wealth, speculation in the stock market, increased personal debt, and hardships in Europe and rural America

Bank Runs

A run on the banks occurs when a large number of customers withdraw their deposits simultaneously due to concerns about the bank's solvency, an issue seen majorly in the Great Depression.

Hawley-Smoot Tariff

a protectionist U.S. law signed by President Hoover that raised import duties to historically high levels. Though it aimed to help struggling farmers and businesses during the early Great Depression, it failed by triggering global retaliatory tariffs, causing global trade to plunge 65%

Hoovervilles

makeshift shantytowns built by homeless people during the Great Depression, named sarcastically after President Herbert Hoover to blame him for the economic crisis.

Dust Bowl

a severe environmental, economic, and agricultural disaster in the Great Plains, caused by extreme drought and poor farming practices that caused severe wind erosion. It ruined farms, triggered massive migration of "Okies" to California, and worsened the Great Depression

How did Hoover approach the Great Depression?

Hoover took a hands-off approach, implementing policies that eventually amounted to nothing. Along with his policies, Hoover put faith in localism, believing municipal governments should support themselves without direct government aid

The Hoover Dam

Hoover’s only successful policy during the Great Depression, as the concrete arch-gravity dam located on the Colorado River was built to provide flood control, hydroelectric power, and water storage for the arid southwestern United States. The dame additionally helped provide work for thousands of Americans

Bonus Army

A group of WWI veterans who marched to Washington, D.C., in 1932 to demand the immediate payment of bonuses that had been promised to them by the government. The violent confrontation between the Bonus Army and federal authorities soon hurt Hoover’s bid for re-election

The New Deal

FDR series of federal programs, public work projects, and financial reforms enacted to combat the Great Depression. Focused on the "3 Rs"—Relief, Recovery, and Reform—it significantly expanded the role of the federal government in the US economy, transitioning toward a modern welfare state.

Bank Holiday

FDR declared a temporary, four day closure of all U.S. banks to stop catastrophic bank runs, stop bank faliures, and stabilize the financial system during the Great Depression

Glass-Steagall Act

established regulations that prohibited commercial banks from engaging in investment banking activities, thus minimizing conflicts of interest. One of its key components was the creation of the FDIC, which insured deposits up to a certain amount, bolstering consumer trust in banks.

Social Security Act

Established a federal safety net funded by payroll taxes which provided old-age pensions, unemployment insurance, insurance for victims of work related accidents, and insurance to the disabled/needy.