Summary of Lecture: The Great Depression (Unit 7 of the AP U.S. History Curriculum)
In today’s session, we delved into the causes and consequences of the Great Depression, exploring this pivotal time in U.S. history. We discussed the economic prosperity of the 1920s that preceded the downturn, the factors leading to the stock market crash of 1929, and how this crash spiraled into the Great Depression. The responses, particularly the introduction of Roosevelt’s New Deal, were examined to understand how the United States transitioned into a limited welfare state. This led to a significant reorganization of the American economic and social system, fundamentally changing the government’s role in the lives of its citizens.
Causes of the Great Depression
- Agricultural Overproduction: Farmers were in severe debt due to years of overproduction and compounded by high tariffs which prohibited global sales.
- Stock Market Crash (Black Tuesday): The market, inflated due to speculative investments and buying on margin (borrowing to buy stocks), collapsed drastically on October 29, 1929.
- Risky Financial Practices: Over-speculation and excessive borrowing led to inflated asset prices, particularly in the stock market.
- Hawley-Smoot Tariff (1930): Implemented by President Hoover, this further crippled global trade for American products.
Immediate Effects on Society
- Economic Bust: Rapid increase in unemployment, homelessness, and poverty.
- Foreclosures and Hoovervilles: Many lost homes; shantytowns named 'Hoovervilles' sprang up, symbolizing disappointment with Hoover’s policies.
Franklin D. Roosevelt and the New Deal
- 1932 Presidential Election: Roosevelt won by promising active government intervention, marking a shift from Hoover’s laissez-faire stance.
- New Deal Goals: Focused on 'The Three Rs':
- Relief for the unemployed (Public Works Administration, Civilian Conservation Corps)
- Recovery of the economy (National Industrial Recovery Act)
- Reform of financial systems (Glass-Steagall Act, Securities and Exchange Commission)
- Social Security Act (1935): Introduced pensions for elderly, a cornerstone of the New Deal remaining impactful today.
Opposition and Criticism
- Political and Public Reaction: Both conservative and liberal groups challenged the New Deal, arguing it either did too much or too little. The Supreme Court ruled some aspects unconstitutional.
- Court Packing Scheme: Roosevelt’s controversial proposal to add favorable justices to the Supreme Court was rejected as a threat to checks and balances.
Legacy of the New Deal
- Regulatory Frameworks and Agencies: Introduction of regulatory bodies like the FDIC and SEC.
- Political Realignment: New affiliations to the Democratic Party from minorities and the working class, influenced by the perceived benefits of the New Deal during their hardships.
Final Thoughts
The Great Depression and the New Deal significantly redefined the scope and role of the federal government in economic and social welfare, setting precedents that continue to influence U.S. policy and politics. This unit provides crucial insights into the dynamics of economic crises and governmental responses.
This comprehensive review of the causes, impacts, and political responses during the Great Depression will aid in understanding the transformative period of American history covered in Unit 7, Topics 9 and 10 of the AP U.S. History curriculum.