Topic 10: The Great Depression 1929-36

Black Tuesday

Black Tuesday refers to October 29, 1929, when the stock market began its precipitous fall following the initial crash on October 24th. On this day, panicked investors dumped their portfolios to avoid further losses, causing stock values to evaporate dramatically—shares of U.S. Steel dropped from $262 to $22, and General Motors fell from $73 to $8 per share. This event occurred during the broader economic instability of the late 1920s and marked the beginning of the stock market's long decline. Black Tuesday is significant because it exposed the deeper problems with the American economy and became the symbolic start of the Great Depression, though the crash itself did not single-handedly cause the economic crisis.

Bank Runs

Bank runs were frantic rushes by depositors to withdraw their money from banks out of fear that the institutions would fail and close their doors. During the Great Depression, fear-stricken observers went to their banks demanding their deposits, and banks that might have otherwise survived fell prey to this panic. This phenomenon was particularly severe between 1930-1932, when 1,352 banks failed in 1930 alone, followed by nearly 2,300 bank collapses in 1932. Bank runs were significant because they accelerated the economic collapse by destroying public confidence in the banking system and eliminating savings, credit, and personal deposits that families desperately needed during the crisis.

Hoovervilles

Hoovervilles were spontaneous shantytowns that dotted America's cities, built by the chronically unemployed who had been forced to camp on public or marginal lands. These makeshift communities were named sarcastically after President Herbert Hoover, whom many blamed for the Depression. The most desperate Americans lived in these settlements, depending on bread lines and street-corner peddling for survival. Hoovervilles were significant because they represented the visible human cost of the Depression and symbolized the failure of Hoover's policies to address the crisis, ultimately contributing to his electoral defeat in 1932.

Smoot-Hawley Tariff

The Smoot-Hawley Tariff of 1930 was the highest tariff in American history, signed into law by President Hoover as a response to the ongoing agricultural depression and his campaign promise to protect American farmers from foreign competition. The tariff was implemented just as global markets began to crumble, and other countries responded in kind by raising their own tariff walls. This protectionist policy contributed to international trade grinding to a halt, with trade dropping from $36 billion in 1929 to only $12 billion in 1932. The Smoot-Hawley Tariff was significant because it exacerbated the world's economic collapse by strangling international commerce and demonstrated how well-intentioned policies could backfire during an economic crisis.

Bonus Army

The Bonus Army was a group of more than 15,000 unemployed World War I veterans and their families who converged on Washington, D.C., in the summer of 1932 to petition for immediate payment of cash bonuses originally scheduled for 1945. They erected a tent city in Anacostia Flats and called themselves the Bonus Expeditionary Force, drilling and marching to demonstrate for their cause. When most veterans left after the Senate voted down the bill, President Hoover ordered the remaining protesters to leave, and General Douglas MacArthur used troops, tanks, and tear gas to forcibly remove them. The Bonus Army incident was significant because it damaged Hoover's reputation and demonstrated his insensitivity toward suffering Americans, contributing to his landslide defeat in the 1932 election.

Franklin D. Roosevelt

Franklin Delano Roosevelt was the Democratic governor of New York who defeated Herbert Hoover in the 1932 presidential election during the depths of the Great Depression. Born into a privileged background in New York's Hudson River Valley, Roosevelt had served as assistant secretary of the navy before contracting polio in 1921, which left him paraplegic. As governor of New York, he established the Temporary Emergency Relief Administration and embraced progressive policies to address economic hardship. Roosevelt's significance lies in his transformation of the federal government's role through the New Deal, making it an active participant in citizens' daily economic struggles and creating lasting changes in American political expectations that endured well beyond the Depression era.

First New Deal

The First New Deal refers to the initial wave of legislation and programs implemented by Franklin Roosevelt during his first term (1933-1935) to combat the Great Depression. This period included the famous First Hundred Days when Roosevelt and Congress rapidly passed numerous emergency measures to stabilize the banking system, provide relief to the unemployed, and begin economic recovery. Key programs included the Civilian Conservation Corps, Federal Emergency Relief Administration, and the National Recovery Administration. The First New Deal was significant because it marked the federal government's unprecedented direct intervention in the economy and established the principle that government had a responsibility to provide economic security for its citizens.

First Hundred Days

The First Hundred Days refers to the initial period of Franklin Roosevelt's presidency from March to June 1933, during which he and Congress enacted numerous laws to address the worst effects of the Great Depression. Roosevelt "directed the entire operation like a seasoned field general," pushing through emergency banking legislation, creating job programs, and establishing new federal agencies. This period saw the passage of the Emergency Banking Act, creation of the CCC and FERA, and the beginning of major recovery programs like the AAA and NRA. The First Hundred Days was significant because it demonstrated decisive federal action during a crisis, restored public confidence in government, and set the precedent for measuring presidential effectiveness by their initial legislative achievements.

Glass-Steagall Banking Act

The Glass-Steagall Banking Act was federal legislation passed in June 1933 that instituted a federal deposit insurance system through the Federal Deposit Insurance Corporation (FDIC) and prohibited the mixing of commercial and investment banking. This act was part of Roosevelt's efforts to stabilize the collapsing banking system after two out of every five banks open in 1929 had been shuttered. The law created strict federal guidelines for bank operations and restored public confidence in the banking system. The Glass-Steagall Act was significant because it fundamentally reformed American banking practices, protected individual depositors from bank failures, and helped prevent the kind of financial speculation that contributed to the stock market crash.

FDIC (Federal Deposit Insurance Corporation)

The Federal Deposit Insurance Corporation (FDIC) was created by the Glass-Steagall Banking Act of 1933 to provide federal insurance for bank deposits and restore public confidence in the banking system. The FDIC was established during Roosevelt's efforts to address the banking crisis, where bank runs and failures had destroyed the savings of millions of Americans. This federal agency guaranteed individual bank deposits up to a specified amount, protecting ordinary citizens from losing their money if their bank failed. The FDIC was significant because it eliminated the fear that drove bank runs, stabilized the banking system, and created a permanent federal safeguard that continues to protect American depositors today.

AAA (Agricultural Adjustment Act)

The Agricultural Adjustment Act (AAA) was created in May 1933 as part of Roosevelt's recovery program to raise agricultural commodity prices and increase farmers' incomes by offering cash incentives to voluntarily limit farm production. The theory was that decreasing supply would raise prices and help farmers who had been suffering from overproduction and declining prices since the early 1920s. The program relied on landowners and local organizations to distribute money fairly to those affected by production limits. The AAA was significant because it represented the federal government's first major intervention in agricultural markets, though it often failed to help the neediest farmworkers as landowners displaced tenants and sharecroppers while keeping subsidy checks for themselves.

CCC(Civilian Conservation Corps)

The Civilian Conservation Corps (CCC) was established during Roosevelt's First Hundred Days as a work relief program that employed young men on conservation and reforestation projects across the country. Created as part of the effort to provide direct relief for suffering Americans, the CCC put unemployed youth to work on environmental projects while providing them with wages, food, and shelter. The program operated throughout the 1930s and employed millions of young Americans in national parks, forests, and other public lands. The CCC was significant because it addressed both unemployment and environmental conservation simultaneously, provided valuable job training for youth, and created lasting improvements to America's natural resources and infrastructure.

WPA (Work Progress Administration)

The Works Progress Administration (WPA) was established in 1935 as part of the Second New Deal with a nearly five-billion-dollar appropriation to employ "the maximum number of persons in the shortest time possible." The WPA was a permanent version of the earlier Civil Works Administration and ultimately employed millions of Americans on public works projects designed and proposed by local governments. Workers paved more than half-a-million miles of roads, constructed thousands of bridges, built schools and post offices, and even painted murals and recorded oral histories. The WPA was significant because it came closer than any New Deal program to providing the federal jobs guarantee Roosevelt had promised, built much of America's physical infrastructure, and demonstrated the government's commitment to direct job creation during economic crisis.

Second New Deal

The Second New Deal refers to the more aggressive set of legislation implemented by Roosevelt between 1935-1936 in response to continued economic hardship and criticism from both left and right. Bolstered by Democratic gains in the 1934 midterm elections and facing reelection in 1936, Roosevelt pursued bolder programs including the WPA, Social Security Act, and National Labor Relations Act. This phase emphasized job creation, labor rights, and social welfare more than the business cooperation focus of the First New Deal. The Second New Deal was significant because it established lasting institutions like Social Security, strengthened federal protection for workers' rights, and created the foundation of the modern American social welfare state.

Dr. Francis Townsend

Dr. Francis Townsend was a former doctor and public health official from California who promoted a plan for old-age pensions during the Great Depression as a critic of Roosevelt's New Deal. Townsend argued that his pension plan would provide economic security for the elderly, who disproportionately suffered poverty, and encourage economic recovery by allowing older workers to retire and make room for younger workers. His proposals gained substantial public support and contributed to the pressure for old-age assistance programs. Townsend was significant because his activism helped push Roosevelt toward creating Social Security, demonstrating how grassroots pressure from the left influenced New Deal policies and contributed to the establishment of federal old-age benefits.

Upton Sinclair

Upton Sinclair was a socialist author and political activist who ran for governor of California in 1934 on his "End Poverty in California" (EPIC) platform, proposing radical solutions to the Great Depression. Though not extensively detailed in this document, Sinclair represented the voices of protest against Roosevelt's more conservative New Deal approaches. His campaign proposed state-run production facilities and cooperative enterprises to address unemployment and poverty. Sinclair was significant because he represented the left-wing criticism that Roosevelt's New Deal was not going far enough to address fundamental economic inequalities, and his popularity helped pressure Roosevelt toward more progressive Second New Deal policies.

Huey Long

Huey Long was a flamboyant Democratic senator from Louisiana who became perhaps the most important "voice of protest" against Roosevelt's New Deal for not going far enough to address inequality. Long proposed a "Share Our Wealth" program in which the federal government would confiscate assets from the extremely wealthy and redistribute them through guaranteed minimum incomes to the less well-off. Over 27,000 Share the Wealth clubs sprang up across the nation as Long traveled the country explaining his program to impoverished and unemployed Americans. Long's significance lies in his populist challenge to Roosevelt from the left, which convinced Roosevelt to more stridently attack inequality and influenced the more aggressive Second New Deal policies before Long's assassination in 1935.

Social Security Act

The Social Security Act was the signature piece of Roosevelt's Second New Deal, passed in 1935 to provide old-age pensions, unemployment insurance, and economic aid based on means to assist the elderly and dependent children. Roosevelt insisted that social security be financed from payroll contributions rather than general federal revenue, declaring "No dole, mustn't have a dole" to separate it from welfare stigma. However, the act excluded domestic workers and farm workers, disproportionately affecting African Americans and reflecting compromises with southern Democrats. The Social Security Act was significant because it became the centerpiece of the modern American social welfare state, established the principle of federal responsibility for citizens' economic well-being, and created a lasting framework for social insurance that continues to provide security for millions of Americans.

Court Packing Plan

The Court Packing Plan was Roosevelt's 1937 proposal to expand the Supreme Court by appointing a new, younger justice for every sitting member over age seventy, potentially adding up to six new justices. Roosevelt was concerned that the conservative Court might overthrow Social Security and had already declared key New Deal programs like the NRA and AAA unconstitutional. Though Roosevelt claimed the measure would help the Court handle its caseload more efficiently, opponents correctly identified it as an attempt to pack the Court with pro-New Deal justices. The Court Packing Plan was significant because it damaged Roosevelt's reputation and emboldened New Deal opponents, though the "chastened" Court thereafter upheld New Deal legislation, and the controversy demonstrated the ongoing tension between Roosevelt's agenda and constitutional limitations.