AMERICA’S HISTORY FOR THE AP® COURSE

Economic Collapse: The American economy faced a dramatic collapse between 1929 and 1932, with GDP falling from $103.1 billion to $58 billion.
- Key Statistics:
  - Consumption fell by 18%.
  - Construction declined by 78%.
  - Private investment dropped by 88%.
  - Nearly 9,000 banks closed, and 100,000 businesses failed.
  - Unemployment reached 25%, with 15 million Americans out of work by 1933.
- Cultural Impact: Reflected in the slogan "Hoover made a souphound outa me!" expressing frustration from the jobless.

The Great Depression was not limited to the United States; it affected multiple countries, including:
- Germany: Suffered heavy reparations and economic contraction leading to a severe financial crisis in 1929.
- Other countries impacted included France, Britain, Argentina, Brazil, Poland, and Canada.
Post-World War I legacies complicated recovery:
- Britain's central bank struggled to manage international finances.
- The international gold standard became less flexible, exacerbating financial troubles during downturns.

Philosophical Approach: Hoover believed in individual responsibility and voluntary business recovery rather than direct government aid.
Federal Actions:
- Cut federal taxes to encourage spending and investment.
- Public assurance about the economy's strength.
- RFC: Established the Reconstruction Finance Corporation to provide federal loans, but the program was implemented cautiously.
- Despite calling for voluntary action and maintaining high tariffs (Smoot-Hawley Tariff), these strategies contributed to a prolonged economic downturn.

Hoover’s adherence to the gold standard is highlighted as a significant cause of the depression's severity.
- Britain and Germany abandoned the gold standard in 1931 and began recovering, while the U.S. remained restrained, discouraging investments.

The public's frustration led to organized protests:
- Hoovervilles: Shantytowns symbolizing widespread homelessness.
- Farmers protested against low prices, represented by the Farmers’ Holiday Association actions in 1932.
- Violent strikes occurred in various sectors, with reports of confrontations leading to deadly outcomes.
Bonus Army (1932): 15,000 WWI veterans marched to demand early payment of bonuses, leading to violent eviction by authorities, exacerbating Hoover’s unpopularity.

The 1932 election was characterized by growing discontent and a desire for change.
- Hoover was renominated by Republicans, while Democrats rallied around Franklin D. Roosevelt (FDR), who promised "bold, persistent experimentation."
- Roosevelt won decisively in the election, receiving significant public support amidst ongoing economic challenges.

FDR’s First Hundred Days: The implementation of major reforms aimed at stabilizing banks, providing relief, and addressing unemployment.
Key Programs:
- Banking Laws: National bank holiday, Emergency Banking Act, FDIC.
- Agricultural Policies: Agricultural Adjustment Act (AAA) aimed at regulating production.
- Efforts to address unemployment through public works programs (CWA, WPA) employed millions.

New Deal legislation like the Wagner Act and the Social Security Act established a modern welfare state:
- Social Security: Major shift in federal responsibility for citizens' welfare.
Resistance and Criticism:
- Political opposition grew. Critiques emerged from both the right (concerns of socialism) and the left (demands for deeper reform).

The New Deal permanently altered the relationship between American citizens and their government, expanding federal roles in economic and social welfare.
Organized labor gained strength through new rights to unionize, while minority groups began to align politically with the Democrats, reshaping party dynamics.

Laid the groundwork for future federal involvement in economic recovery and welfare, leading to lasting political allegiance shifts among various demographics in the U.S.