The Great Depression and World War II Era Notes
The Great Depression
The Great Depression (1929-1941) was the most severe economic crisis in American history.
It led to unprecedented unemployment, poverty, and social upheaval, transforming American society and government.
Understanding its causes and effects is crucial for grasping the evolution of the American economy and government in the 20th century.
Economic Background
America was transitioning from a farming to an industrial economy, dominated by big businesses.
This shift created new problems that contributed to the Depression.
Consumer purchasing power couldn't keep pace with production, creating economic imbalances.
The "Roaring Twenties" featured uneven prosperity; some industries and urban areas boomed, while agriculture and rural areas struggled.
Wealth inequality increased, with the richest 1% controlling about 40% of the nation's wealth.
The financial system lacked adequate regulation.
Causes of the Great Depression
Multiple problems occurred simultaneously, exacerbating the economic collapse.
Overproduction
Industries and farms produced more goods than consumers could afford.
The agricultural sector had been overproducing since the end of World War I.
Manufacturing capacity expanded beyond sustainable market demand.
Stock Market Speculation
Stock prices rose dramatically in the 1920s, creating a speculative bubble.
Many investors bought stocks "on margin" (paying 10% down and borrowing the rest).
When the market fell, investors received "margin calls," forcing them to sell stocks, driving prices down further.
The stock market crashed on "Black Tuesday," October 29, 1929, with the Dow Jones losing nearly 25% of its value in two days.
Banking System Failures
Banks made risky loans in the 1920s with little oversight.
Many loans defaulted when economic conditions worsened.
"Bank runs" occurred as depositors rushed to withdraw savings.
By 1933, thousands of banks had failed, wiping out millions of Americans' savings.
The Federal Reserve failed to act as a "lender of last resort," tightening the money supply instead of expanding it.
Reduction in Consumer Spending
As unemployment rose, consumers had less money to spend.
Businesses cut production and laid off workers, creating a devastating economic cycle.
Depth and Impact of the Depression
The Depression affected nearly every part of American life.
Unemployment reached approximately 25% by 1933 (compared to 3-4% before the crash).
Industrial production fell by nearly 45% between 1929 and 1932.
The national income dropped by more than 50%.
Homelessness increased dramatically, with "Hoovervilles" (makeshift settlements) appearing across the country.
Farmers were hit by the economic crisis and the Dust Bowl.
The Dust Bowl
Poor farming practices and severe drought turned the Great Plains into a "Dust Bowl."
Massive dust storms destroyed farms and forced families to migrate.
Severe drought combined with decades of inappropriate farming techniques.
Massive dust storms swept across the Great Plains from 1930-1936.
Thousands of families lost their farms, especially in Oklahoma, Texas, and Kansas.
Many migrated to California and other western states, becoming known as "Okies."
The disaster highlighted the need for sustainable agriculture.
Hoover's Response
President Herbert Hoover's approach to the crisis reflected traditional Republican values but proved inadequate.
Hoover initially believed the Depression would be short-lived and self-correcting.
He resisted direct federal relief, believing it would weaken self-reliance.
He created the Reconstruction Finance Corporation (RFC) to provide loans to banks and businesses.
He supported the Federal Home Loan Bank Act to prevent home foreclosures.
He signed the Hawley-Smoot Tariff, raising import duties but triggering retaliatory tariffs, reducing international trade.
He encouraged voluntary cooperation among businesses to maintain wages and employment.
Public Reaction to Hoover
People grew angry with Hoover due to the worsening conditions and perceived lack of help.
Homeless encampments were mockingly named "Hoovervilles."
The "Bonus Army" of World War I veterans marched on Washington in 1932, demanding early payment of service bonuses.
Hoover ordered the army to clear their encampment, creating a public relations disaster.
Hoover became a symbol of government indifference.
Election of 1932
The 1932 election represented a turning point in American politics.
Franklin D. Roosevelt won by promising a "New Deal" to help Americans suffering from the Depression.
His victory signaled that voters wanted the government to take a more active role in addressing economic problems.
During his inaugural address in March 1933, FDR famously declared that "the only thing we have to fear is fear itself."
Roosevelt's election marked the beginning of a significant shift in the role of the federal government in American society.
His First Hundred Days featured unprecedented legislative action to address the crisis.
Lasting Impact
The Great Depression fundamentally altered Americans' expectations of government.
Americans supported a more active government that would provide a safety net and regulate the economy.
This shift would profoundly influence American politics and society throughout the remainder of the 20th century.
Roosevelt's New Deal
Roosevelt took bold action through experimentation and direct communication with the American people via "Fireside Chats."
He declared a "Banking Holiday" to stabilize the financial system.
He passed the 21st Amendment to repeal Prohibition, increasing tax revenue and boosting public morale.
The many agencies he created (nicknamed "alphabet soup" agencies) represented a dramatic expansion of government involvement in the economy.
The Three Rs of the New Deal
The New Deal tackled America's economic crisis through a three-pronged approach focused on immediate help, economic recovery, and long-term reforms.
Relief
Programs designed to help those suffering immediate hardship.
Federal Emergency Relief Administration (FERA) provided direct payments to those in need.
Civilian Conservation Corps (CCC) employed young men in conservation projects.
Works Progress Administration (WPA) hired millions for public works and cultural projects.
Recovery
Initiatives aimed at restoring economic growth.
Agricultural Adjustment Administration (AAA) tried to raise farm prices by reducing crop production.
National Recovery Administration (NRA) established codes to regulate business competition.
Tennessee Valley Authority (TVA) built dams and power plants in the impoverished Tennessee Valley region.
Reform
Structural changes to prevent future economic disasters.
Securities and Exchange Commission (SEC) regulated the stock market.
Federal Deposit Insurance Corporation (FDIC) protected bank deposits.
Glass-Steagall Act separated commercial and investment banking.
Social Security Act created a pension system for elderly Americans.
First and Second New Deal
Roosevelt's approach evolved over time, creating two distinct phases.
First New Deal (1933-1935)
Focused on immediate crisis management and economic stabilization.
Created many of the major "alphabet soup" agencies.
Emphasized cooperation between government and business.
Supreme Court declared some programs unconstitutional, including the NRA.
Second New Deal (1935-1938)
Shifted toward more reform-oriented, progressive policies.
Emphasized support for labor unions and stronger business regulation.
Established long-lasting programs like Social Security.
Created a stronger social safety net for vulnerable Americans.
Key New Deal Programs
AAA (Agricultural Adjustment Administration): Paid farmers to reduce production to raise crop prices.
Helped some farmers but often displaced sharecroppers; declared unconstitutional in 1935.
CCC (Civilian Conservation Corps): Employed young men in conservation projects.
Provided jobs for 3 million young men; improved national parks and forests.
FDIC (Federal Deposit Insurance Corporation): Insured bank deposits.
Prevented bank runs and restored confidence in the banking system.
FERA (Federal Emergency Relief Administration): Provided direct aid to the poor.
Helped millions with immediate needs.
FHA (Federal Housing Administration): Insured mortgages for homes.
Stimulated housing construction but often discriminated against minorities.
NRA (National Recovery Administration): Set business codes for fair competition.
Initially successful but declared unconstitutional in 1935.
PWA (Public Works Administration): Funded major construction projects.
Built infrastructure while creating jobs.
SEC (Securities & Exchange Commission): Regulated stock market.
Prevented speculative practices that contributed to 1929 crash.
SSA (Social Security Act): Created pension system and unemployment insurance.
Established enduring safety net for elderly and unemployed.
TVA (Tennessee Valley Authority): Developed the Tennessee River basin with dams and power plants.
Transformed one of America's poorest regions with electricity and flood control.
WPA (Works Progress Administration): Employed millions in public works and arts.
Built infrastructure and supported cultural projects nationwide.
Labor Reform
The New Deal dramatically improved conditions for American workers through new laws that protected their right to organize.
The Wagner Act made it illegal for employers to fire workers for joining unions, leading to a massive increase in union membership.
The National Labor Relations (Wagner) Act of 1935 protected workers' right to organize and bargain collectively.
It created the National Labor Relations Board to oversee labor-management relations.
The act prohibited unfair labor practices by employers, including firing workers for union activities.
Union membership grew dramatically, from about 3 million in 1933 to over 10 million by 1941.
The Congress of Industrial Organizations (CIO) formed to organize workers in mass production industries.
Social Security
The Social Security Act of 1935 represents one of the New Deal's most significant and lasting achievements.
Established a federal retirement program for people over age 65.
Created a system of unemployment insurance.
Provided assistance to dependent children, the disabled, and the blind.
Funded through payroll taxes on both employers and employees.
Initially excluded agricultural and domestic workers, leaving out many African Americans and women.
Critics of the New Deal
The New Deal faced opposition from both the political left and right.
Critics from the Left
Huey Long proposed his "Share Our Wealth" plan to redistribute income more aggressively.
Father Charles Coughlin initially supported FDR but turned against him, promoting extreme views.
Dr. Francis Townsend advocated for larger pensions for the elderly with his Townsend Plan.
Critics from the Right
Conservative opponents viewed the New Deal as socialism.
The American Liberty League attacked Roosevelt's policies.
The Supreme Court initially struck down several key New Deal programs as unconstitutional.
The Court-Packing Plan
In 1937, FDR attempted to overcome the Supreme Court striking down New Deal programs with a plan to reshape the Court.
The plan faced fierce opposition.
The Court began upholding New Deal legislation in what was called "the switch in time that saved nine."
Although the plan failed, the Court began upholding New Deal legislation in what was called "the switch in time that saved nine"
The controversy damaged Roosevelt's political capital but ultimately the Court became more supportive of New Deal programs
Economic Impact and Legacy
The New Deal brought relief to millions but didn't end the Depression completely.
Unemployment remained high, and a recession occurred in 1937-38.
The economy only fully recovered with World War II.
Despite these limitations, the New Deal provided immediate relief and created lasting reforms.
American Foreign Policy and World War II
American Isolationism and Engagement
After World War I, the U.S. pursued a unilateral foreign policy, balancing isolationism with selective engagement.
Rejected membership in the League of Nations and the World Court.
Participated in arms limitation efforts while avoiding security alliances.
Used international investment and trade as primary tools of influence.
Sought peace through negotiation rather than military commitments.
The Washington Naval Conference (1921-1922) established tonnage ratios for major naval powers (US and UK: 5, Japan: 3, France and Italy: 1.75).
The Kellogg-Briand Pact (1928) represented America's idealistic attempt to outlaw war.
Economic Diplomacy and Latin America
American foreign policy increasingly relied on economic tools.
Through the Dawes Plan (1924), American banks made loans to Germany.
In Latin America, the United States transformed its approach under the Good Neighbor Policy.
FDR pledged never to intervene in Latin American internal affairs.
The U.S. terminated the Platt Amendment, ending the right to intervene in Cuba.
Emphasis shifted to reciprocal trade agreements and cultural exchanges.
Response to Global Threats
As fascist and militarist regimes gained power, American policy shifted from neutrality toward supporting democracies.
Most Americans remained opposed to direct intervention.
President Roosevelt increasingly warned about totalitarian dangers.
Neutrality Legislation and Path to War
Congress passed a series of Neutrality Acts to prevent American entanglement.
The 1935 Act prohibited arms sales to nations at war.
The 1937 Act created "cash and carry" provisions for trade with belligerents.
As World War II began, Roosevelt sought greater flexibility to help Britain and France.
American support for Britain accelerated through the Destroyer-for-Bases Deal, the Selective Service Act, and the Lend-Lease Act of 1941.
In August 1941, Roosevelt and Churchill issued the Atlantic Charter.
Rising tensions with Japan culminated in the December 7, 1941 attack on Pearl Harbor.
Germany and Italy declared war on the United States days later.
America's Entry into World War II
America's entry into World War II transformed the nation economically and socially.
The massive mobilization effort ended the Great Depression.
The Arsenal of Democracy
President Roosevelt committed to making the United States the "Arsenal of Democracy."
Liberty Ships (cargo vessels) could be built in as little as 14 days.
Ford's Willow Run factory produced a B-24 bomber every hour.
Between 1941 and 1945, the U.S. manufactured 300,000 aircraft, 86,000 tanks, and 71,000 naval vessels.
The government directed these conversions through agencies like the War Production Board (WPB).
Economic Recovery and Management
World War II finally ended the Great Depression.
Unemployment virtually disappeared as 15 million Americans served in the armed forces.
Government spending increased from 9 billion in 1939 to over 98 billion in 1945.
Industrial production doubled between 1939 and 1945.
Per capita income increased by 50\% during the war years.
Government Agency Primary Function
War Production Board (WPB) Directed manufacturing priorities and conversion to war production
Office of Price Administration (OPA) Controlled consumer prices and implemented rationing programs
War Manpower Commission Allocated labor resources and recruited workers
War Finance Division Organized war bond drives to fund the war effort
The Four Freedoms
In January 1941, President Roosevelt articulated the ideological basis for American involvement in the war.
Freedom of speech
Freedom of religion
Freedom from want
Freedom from fear
Women in the War Effort
Female employment increased from 14 million to 19 million between 1940 and 1945.
Women took jobs in defense industries previously reserved for men.
"Rosie the Riveter" became an iconic symbol of women in the defense industry.
African Americans and the Double Victory Campaign
Over one million Black Americans served in the armed forces, though in segregated units.
The Tuskegee Airmen proved Black pilots could excel in combat.
Defense industry jobs offered higher wages and new opportunities.
The "Double V Campaign" called for victory over fascism abroad and racism at home.
President Roosevelt issued Executive Order 8802, which prohibited racial discrimination in defense industries.
Mexican Americans and Labor Programs
The Bracero Program brought thousands of Mexican workers to the United States.
Mexican Americans joined the armed forces in large numbers.
Defense industry jobs offered new economic opportunities.
The Zoot Suit Riots of 1943 in Los Angeles saw white servicemen attacking Mexican American youth.
Native Americans and Military Service
Approximately 25,000 Native Americans served in the armed forces.
Navajo Code Talkers used their native language to create an unbreakable code.
Japanese American Internment
Executive Order 9066 authorized the removal of people of Japanese ancestry from the West Coast.
Over 110,000 Japanese Americans were forced into internment camps.
The Supreme Court upheld the constitutionality of the internment in Korematsu v. United States (1944).
Despite this treatment, approximately 33,000 Japanese Americans served in the U.S. military.
Key Events of World War II
Attack on Pearl Harbor
Diplomatic negotiations between the United States and Japan broke down in late 1941.
On December 7, 1941, Japanese carrier-based aircraft launched a surprise attack on Pearl Harbor.
More than 2,400 American service members and civilians were killed.
The following day, President Roosevelt addressed Congress, calling December 7th "a date which will live in infamy," and requested a declaration of war against Japan.
The Holocaust and American Response
The Holocaust was the state-sponsored murder of six million Jewish people and millions of others by the Nazi regime.
Early reports of Nazi atrocities reached the United States by 1942.
The War Refugee Board, established by Roosevelt in 1944, helped rescue thousands of Jews.
The European Theater
The US and Britain achieved a complete wartime partnership.
They decided that Germany posed a greater danger and thus gave priority to the European theater.
General George Patton conquered Africa by May 1943.
Eisenhower secured the beachhead by D-Day, June 6, 1944.
The Pacific Theater
The war in the Pacific was dominated by naval forces battling over vast areas.
Japanese atrocities began at the very beginning of the occupation. The captured Americans and Filipinos were marched from Bataan with little food, water, or rest. Coupled with rampant violence, between 7,000 and 10,000 died on what became known as the Bataan Death March.
Atomic Bomb
The US had three possible ways to proceed.
Truman decided to use this new atomic bomb, viewing it as a way to save hundreds of thousands of American lives.
On August 6, the bomb’s target was Hiroshima.
Two days later, with no response, the US dropped a second bomb on Nagasaki.
Wartime Conferences
During the war, the Big Three (leaders of the US, Soviet Union, and Great Britain) arranged to confer secretly to coordinate their military strategies and lay the foundation for peace terms and postwar involvement.
Casablanca
In January 1943, Roosevelt and Churchill agreed on the grand strategy to win the war, including the invasion of Sicily and Italy, and the demand for “unconditional surrender” from the Axis powers.
Tehran
The first wartime Big Three conference brought together Roosevelt, Stalin, and Churchill in Tehran, Iran, in 1943.
They agreed that Britain and America would begin their drive to liberate France, while the Soviets would invade Germany and eventually join the war against Japan.
Yalta
The Big Three met again in February 1945 at the Yalta Conference.
Germany would be divided into occupation zones
There would be free elections in the liberated countries of Eastern Europe
The Soviets would enter the war against Japan, which they did just as Japan surrendered
A new world peace organization (the future United Nations) would be formed at a conference in San Francisco
Potsdam
In late July, after Germany’s surrender, only Stalin remained from the original Big Three. Truman was now US president, and Clement Attlee had replaced Churchill as British prime minister.
To demand Japan’s unconditional surrender
To hold war-crime trials of Nazi leaders
Post-War America
America's Postwar Position
The United States emerged as the world's dominant economic, military, and political power.
Minimal damage to the U.S. mainland
Relatively lower casualties (approximately 418,000 American deaths compared to an estimated 20 million Soviet deaths)
A dramatically expanded industrial capacity that had doubled during the war
The world's strongest navy and air force
Exclusive possession of atomic weapons
The world's largest economy, producing about half of the world's goods
The Bretton Woods System
The United States used its economic dominance to reshape the international financial system.
In July 1944, representatives from 44 nations met at Bretton Woods, New Hampshire, to design a new economic order.
A system of fixed exchange rates with currencies pegged to the U.S. dollar
The dollar as the world's reserve currency, backed by gold at 35 per ounce
The International Monetary Fund (IMF) to stabilize currencies and assist nations facing financial difficulties
The World Bank to provide loans for postwar reconstruction and development
Postwar Treaties and Settlements
The United States played the leading role in shaping peace treaties and establishing new international arrangements after the war.
Paris Peace Treaties
In 1947, the victorious Allies signed peace treaties with Italy, Hungary, Romania, Bulgaria, and Finland.
Redrew national boundaries in Europe
Required payment of war reparations
Imposed limitations on military forces
Established conditions for withdrawing occupation forces
Treaty of Peace with Japan
Officially ended the state of war between Japan and the Allied Powers
Recognized Japan's sovereignty
Required Japanese acceptance of the judgments of the Tokyo War Crimes Tribunal
Allowed the United States to maintain military bases in Japan
Occupation Policies in Germany and Japan
The United States implemented policies in occupied territories designed to prevent future aggression while rebuilding former enemies as democratic allies
Industrial facilities were initially dismantled as war reparations
Denazification programs removed former Nazi officials from positions of power
Democratic institutions were established in the Western zones
The U.S. initiated the Marshall Plan to rebuild the German economy
War Crimes Trials
The United States took the lead in establishing international tribunals to prosecute Axis leaders for war crimes and crimes against humanity
Crimes against peace (planning and waging aggressive war)
War crimes (violations of the laws of war)
Crimes against humanity (including the Holocaust)
Legal precedents
Individual responsibility for violations of international law
Rejection of "following orders" as a defense for atrocities
The concept that some crimes are so heinous they violate universal moral law
The United Nations
The United States played the leading role in establishing the United Nations as the cornerstone of the postwar international system
Maintain international peace and security
Develop friendly relations among nations
Promote social progress and human rights
Provide a forum for cooperation in solving international problems
Structure of the UN
The Security Council gave permanent membership and veto power to five major powers: the U.S., Soviet Union, China, Britain, and France
The organization's headquarters was established in New York City
The Universal Declaration of Human Rights, adopted in 1948, reflected American democratic values
Cold War
The bombings of Hiroshima and Nagasaki had demonstrated the devastating potential of these weapons. The nuclear monopoly
Provided the United States with unmatched strategic leverage
Created significant tensions with the Soviet Union, which raced to develop its own nuclear capability
Contributed to an emerging arms race that would define the Cold War era
Ended in 1949 when the Soviet Union successfully tested its first atomic bomb
Period 8 (1945-1980)
The Cold War Context
The Cold War fundamentally shaped American foreign and domestic policy during this period
Proxy wars in Korea, Vietnam, and other regions
Nuclear arms race and space race
Economic and diplomatic competition for allies
Military alliances (NATO vs. Warsaw Pact)
Social Movements and Cultural Change
The post-war period witnessed dramatic social transformation as various groups advocated for equality and justice
Civil Rights Movement
Civil Rights Act (1964) and Voting Rights Act (1965)
Feminist Movement
Challenged traditional gender roles and expectations
Fought for workplace equality, reproductive rights, and legal protections
Expanded from primarily white, middle-class concerns to include intersectional perspectives addressing race, class, and sexuality
Anti-War Movement
Diverse coalition including pacifists, students, civil rights activists, and others
Counterculture
Challenged conventional norms around gender, sexuality, and race
Economic and Demographic Shifts
Post-War Economic Boom
Strong industrial growth and technological innovation
Population and Migration Changes
Baby Boom generation created demographic surge
Environmental Concerns
Growing awareness of pollution and environmental degradation
Political Transformation
Conservative movement gained strength in response to social changes and perceived government overreach
Global Relationships
Decolonization created new nations and nationalist movements