Heimler’s History: The Great Depression and The New Deal

Introduction

• Focus on Unit 7 of the AP U.S. History curriculum, specifically the Great Depression.
• Objectives:
  • Explain the causes of the Great Depression.
  • Discuss its effects on the economy.

Causes of the Great Depression

• Stock Market Crash of 1929:

  • Black Tuesday: October 29th, 1929.
  • Stock market crash was a process, not a single event.

• Agricultural Overproduction:

  • Farmers overproduced, leading to severe debt.
  • High tariffs (e.g., Hawley-Smoot Tariff) worsened the situation by crippling U.S. ability to sell excess products globally.

• Risky Investment Behavior:

  • Speculation: Buying stocks on margin.
  • Assumption that stock prices would always rise led to excessive borrowing.

Effects on Economy and Society

• Widespread poverty and homelessness.
• Foreclosures on home mortgages.
• Emergence of "Hoovervilles," named after President Hoover, reflecting criticism of his non-interventionist policies.

Political Shift

• Election of 1932:
  • Franklin D. Roosevelt won against Hoover.
  • Roosevelt promised heavy government intervention.

The New Deal

• Aimed to transform the U.S. into a limited welfare state and expand federal government role.

The Three R's of the New Deal

1. Relief for the Unemployed:

   • Programs like Public Works Administration (PWA), Tennessee Valley Authority (TVA), Civilian Conservation Corps (CCC).

2. Recovery for Businesses:

   • National Industrial Recovery Act (NIRA): Established codes for fair labor practices.

3. Reform of Economic Institutions:

   • Glass-Steagall Act:
     • Increased bank regulations.
     • Established Federal Deposit Insurance Corporation (FDIC).
   • Securities and Exchange Commission (SEC):
     • Regulated the stock market, prevented practices like insider trading.

Second Phase of the New Deal

• Social Security Act of 1935:
  • Provided income for workers over 65.

Criticism of the New Deal

• Liberal Criticism:

  • Claimed it favored big businesses over the unemployed and poor.

• Conservative Criticism:

  • Seen as federal overreach.
  • Supreme Court challenges led to narrowing of some New Deal measures.
  • "Court Packing" Scheme proposal by Roosevelt was unsuccessful.

Legacy of the New Deal

• Established reforms and regulatory agencies.
• Long-term political realignment:
  • Black people, working-class, and ethnic minorities shifted towards the Democratic Party.

Conclusion

• Understanding of Unit 7 topics 9 and 10 for AP U.S. History.
• Encouragement to subscribe for more educational content.