Heimler’s History: The Great Depression

Overview

Stock Market Crash (Black Tuesday - October 29, 1929):
- Culmination of a weeks-long process of decline.
Agricultural Overproduction:
- Farmers in severe debt due to overproduction.
- High tariffs, especially the Hawley-Smoot Tariff of 1930, hindered global trade.
Risky Stock Market Practices:
- Buying on margin leading to speculation.
- Borrowing money to buy stocks assuming prices would continuously rise.

Widespread Poverty and Homelessness:
- Increase in home foreclosures; emergence of "Hoovervilles."
Criticism of President Hoover:
- Laissez-faire economic policies criticized for lack of government intervention.

Election of Franklin D. Roosevelt (1932):
- Promised heavy government intervention.
- Expansion of federal government tasks.
Three R’s of the New Deal:
- Relief for the unemployed:
  - Public Works Administration (PWA), Tennessee Valley Authority (TVA), Civilian Conservation Corps (CCC).
- Recovery for businesses:
  - National Industrial Recovery Act (NIRA) to stabilize wages, hours, and prices.
- Reform of economic institutions:
  - Glass-Steagall Act: Increased banking regulation and birthed the Federal Deposit Insurance Corporation (FDIC).
  - Securities and Exchange Commission (SEC) to regulate the stock market.
Social Security Act of 1935:
- Income safety net for workers over 65.

Liberal Criticism:
- Belief that it favored big businesses over the poor.
Conservative Criticism:
- Viewed as federal overreach.
- Led to Supreme Court challenges and narrowing of some New Deal policies.
Roosevelt’s Court-Packing Scheme:
- Attempt to add sympathetic judges to Supreme Court blocked by Congress.

Significant reforms and regulatory agencies established.
Political realignment of various groups to the Democratic Party due to New Deal policies.