Heimler's History: The Great Depression and the New Deal

Introduction

• Unit 7 of the AP U.S. History curriculum.
• Focus on the Great Depression and its effects on the economy.

The Great Depression

Causes of the Great Depression

• Stock Market Crash of 1929 (Black Tuesday)
  • October 29th, 1929 marked as the day when the stock market crash reached its peak.
  • Causes:
    • Agricultural Overproduction:
      • Farmers produced too much, leading to severe debt.
      • High tariffs, like the Hawley-Smoot Tariff of 1930, hindered selling excess products globally.
    • Speculative Investment:
      • Risky behavior such as buying on margin.
      • Assumption that stock prices would continue to rise.
      • Resulted in crushing debt when stock prices fell.

Effects of the Great Depression

• Widespread poverty and homelessness.
• Foreclosures on home mortgages increased.
• Emergence of shantytowns known as "Hoovervilles" as a critique of President Hoover's policies.

Political Response

Herbert Hoover's Response

• Laissez-faire economic policies.
• Belief that the economy would correct itself without much government intervention.

Franklin D. Roosevelt's New Deal

• FDR won the 1932 election promising heavy government intervention.
• Major expansion of federal government's role.

The New Deal: Objectives and Programs

• Three R's: Relief, Recovery, Reform
  • Relief for the Unemployed:
    • Public Works Administration (PWA): Infrastructure work.
    • Tennessee Valley Authority (TVA): Managed electric power plants.
    • Civilian Conservation Corps (CCC): Conservation projects for young men.
  • Recovery for Businesses:
    • National Industrial Recovery Act (NIRA):
      • Addressed economic hardship due to competition.
      • Established minimum wage, shorter hours, and regulated prices.
  • Reform of Economic Institutions:
    • Glass-Steagall Act of 1933:
      • Increased bank regulations.
      • Established Federal Deposit Insurance Corporation (FDIC).
    • Securities and Exchange Commission (SEC):
      • Regulated stock market and prevented unethical practices.
  • Second Phase of the New Deal:
    • Social Security Act of 1935:
      • Provided a safety net for workers over 65.

Criticisms of the New Deal

• Criticized by both liberals and conservatives.
  • Liberals: Felt it favored big businesses over the unemployed and poor.
  • Conservatives: Viewed it as federal overreach.
• Supreme Court challenges led to narrowing of New Deal scope.
• Roosevelt's "Court Packing Scheme" was proposed but met with strong opposition.

Legacy of the New Deal

• Left a legacy of reforms and regulatory agencies.
• Fostered political realignment among Black people, working class, and ethnic minorities towards the Democratic Party.

Conclusion

• The New Deal was a significant shift towards a limited welfare state and expanded modern American liberalism.
• Key takeaways for AP U.S. History Unit 7 topics 9 and 10.

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• Heimler out.