The Great Depression was a time of severe economic hardship in the United States that lasted from 1929 to the late 1930s. It began with the stock market crash of 1929, which caused widespread panic and bank failures. Millions of people lost their jobs, businesses closed, and poverty became widespread. People struggled to find food and shelter, and many families were forced to rely on government assistance or charity to survive. The Dust Bowl, a period of severe drought and dust storms in the Midwest, added to the hardship faced by many Americans.Â
📚Causes of the Great Depression 📚
During the 1920s, many investors bought stocks on margin, borrowing money to invest. This practice inflated the stock market, making it increasingly risky. When the market eventually crashed in 1929, investors who had borrowed heavily lost significant amounts of money. This widespread financial loss contributed to the Great Depression, a severe economic downturn that lasted throughout the 1930s.
The excessive risk-taking by investors was a major factor in the market crash. This overspeculation created a bubble in the stock market, which eventually burst, leading to a chain reaction of economic problems.
In 1929 the stock market crashed, wiping out billions of dollars in investments. This scared investors and made them less likely to invest in businesses, slowing down economic growth.
Overproduction
Businesses produced too many goods, leading to a surplus (excess). This caused prices to fall, and businesses made less money.
Decrease of Consumer Spending
People were afraid to spend money, so they saved it instead. This reduced demand for goods and services, leading to further job losses and business failures.Â
Source: http://www.shmoop.com/great-depression/teaching.htmÂ
Bank FailuresÂ
Many banks failed during the Great Depression, leading to people losing their life savings. This made it harder for people to borrow money, which further slowed down the economy.
Source: https://history.wf.com/surviving-and-thriving-in-the-great-depression/
Is a law that made it much more expensive to buy goods or products from other countries. The goal was to help American businesses by making their products cheaper compared to foreign ones. However, other countries got upset and also raised their prices on American goods. This made it harder for American businesses to sell their products overseas, which hurt the U.S. economy and made the Great Depression even worse.Â
📚Immediate EffectsÂ
The Great Depression led to businesses that were forced to close, leading to widespread unemployment. This economic downturn caused many people to lose their jobs, resulting in increased homelessness. As companies struggled to stay afloat, they were forced to lay off employees, further exacerbating the problem.Â
Source of Visual: https://www.docsteach.org/activities/printactivity/great-depression-photographs
During the Great Depression, many people lost their jobs and were unable to pay their mortgages. As a result, banks took ownership of people's homes and property, a process known as foreclosure. This left many families homeless and struggling to survive.Â
📚The Dust Bowl 📚
Source: Docsteach.org [Farm Inundated with Sand from Soil Erosion 1930s]
Source: Docsteach.org [Farmer and Sons Walking in a Dust Storm4/1936]
Source: Docsteach.org [ Dust Storms; "In 1934 and 1936 drought and dust storms ravaged the great American plains and added to the New Deal's reflief burden."]
📚President Hoover Response 📚
President Hoover, at first, thought the Great Depression would fix itself. He believed in the power of businesses and charities to help people. But as the crisis grew worse, he realized he needed to do more. He created a government program called the Reconstruction Finance Corporation to give money to banks and businesses. While this helped some, many people still suffered. Critics argued that Hoover’s actions were too little, too late, and that the government needed to do much more to help the American people.Â
Source of visual: University of Washington Libraries, Special Collections, [Order Number LEE250]
Many Americans lost their jobs and homes. With nowhere to go, some people built makeshift shelters out of scrap materials like cardboard, wood, and tin. These shantytowns were often located on the outskirts of cities and were nicknamed "Hoovervilles," after President Herbert Hoover, who was blamed by many for the economic crisis. Living in Hoovervilles was incredibly difficult, as residents faced harsh conditions, poverty, and disease.Â
Source of visual: UCLA Digital Photo Archive
The Mexican Repatriation was a mass deportation of Mexican and Mexican-American citizens from the United States during the Great Depression. During this time period, widespread unemployment led some people to blame Mexican immigrants for taking jobs from American citizens. Many people were deported without due process, and some were even separated from their families. It's estimated that between 400,000 and 2 million people were deported or forcibly sent to Mexico during this period, with a significant portion of them being U.S. citizens. The Mexican Repatriation had a devastating impact on Mexican-American communities. Many families were torn apart, and many people lost their homes, jobs, and livelihoods.Â
📚From President Hoover to Roosevelt's: A Presidential Change During the Great Depression 📚
Franklin D. Roosevelt, often called FDR, served as the 32nd president of the United States during some of the toughest times in American history, including the Great Depression and World War II. He is known for his New Deal programs that helped the country recover from the Great Depression. His wife, Eleanor Roosevelt, was not just the First Lady—she was an activist and a powerful voice for social justice, human rights, and women's rights. Together, FDR and Eleanor helped shape the country’s future during a period of great change.
The New Deal was a series of programs and reforms aimed at helping the country recover from the economic crisis. At that time, the U.S. faced high unemployment and widespread poverty. Roosevelt believed the government needed to do more to help people, so he introduced the New Deal. It included programs like the Works Progress Administration (WPA), the Social Security Act, and the Civilian Conservation Corps (CCC), among others. These programs provided jobs, financial support, and public services to those in need. The New Deal not only helped many Americans get back on their feet but also changed the way people saw the role of the government in everyday life.
Relief: Immediate help for those who were suffering the most, such as providing food, jobs, and financial support to the unemployed and poor.
Recovery: Programs aimed at helping the economy bounce back from the depression by stimulating growth, creating jobs, and supporting industries.
Reform: Long-term changes to prevent future economic crises, such as regulating the banking system, establishing Social Security, and creating labor laws to protect workers.
Reform Programs:Â
Social Security Act
Securities and Exchange Commission (SEC)Â
Federal Deposit Insurance Corporation (FDIC)Â
National Labor Relations Act (Wagner Act)Â
Banking Act of 1933 (Glass-Steagall Act)
Truth in Securities Act (1933)Â Â
📚Social Security ActÂ
Created a system to provide pensions for the elderly, unemployment insurance, and help for children and the disabled. It also gave Congress the power to pass laws that are needed for the well-being of the country.
📚Federal Deposit Insurance Corporation (FDIC)
Insured bank deposits to restore trust in the banking system and prevent bank runs. Â
Securities and Exchange Commission (SEC)Â
Regulated the stock market to prevent fraud, abuse, and speculation that contributed to the Great Depression.Â
Relief:
Civilian Conservation Corps (CCC)
Federal Emergency Relief Administration (FERA)
Public Works Administration (PWA)
Works Progress Administration (WPA)
Civil Works Administration (CWA)
📚Civilian Conservation Corps (CCC)
Provided jobs for young, unemployed men to work on environmental projects like building parks and planting trees.
📚 Works Progress Administration (WPA)
Created millions of jobs for the unemployed to work on public infrastructure, as well as in the arts, theater, and education.
Federal Emergency Relief Administration (FERA)
Gave direct aid to the unemployed and poor through grants and funding for local relief programs.
Recovery
National Industrial Recovery Act (NIRA)
Agricultural Adjustment Act (AAA)
Tennessee Valley Authority (TVA)
Home Owners' Loan Corporation (HOLC)
Farm Credit Administration (FCA)
Tennessee Valley Authority (TVA)
Developed the Tennessee Valley region by providing jobs, building dams, and improving infrastructure, while also promoting electricity and flood control.
Agricultural Adjustment Act (AAA)
Aimed to boost farm prices by reducing surpluses, paying farmers to reduce crop production, and raising prices for agricultural products.
Home Owners' Loan Corporation (HOLC)
Provided low-interest loans to homeowners facing foreclosure, helping them keep their homes.
FDR's fireside chats were radio broadcasts where President Franklin D. Roosevelt spoke directly to the American people to explain his plans and reassure them during tough times like the Great Depression. He used these chats to make his policies feel personal and help Americans feel more confident about the future.
The monetary policy focused on stabilizing the economy by making sure there was enough money for people to spend and invest. One key part of this was the Gold Standard change, where FDR took the U.S. off the gold standard to allow more money to flow through the economy. This helped lower interest rates and made it easier for people and businesses to borrow money, which helped kickstart the economy.
The Federal Reserve Act of 1913 created the Federal Reserve System, which is the central bank of the United States. Its purpose is to control the nation’s money supply, help keep prices stable, and make sure banks stay strong. The Federal Reserve also sets interest rates, which affects how much it costs to borrow money and helps control inflation.
📚The New Deal Criticism📚
The New Deal faced criticism from both the left and the right. Some people on the left thought it didn’t do enough to help the poor and wanted more radical changes, while some on the right felt it gave the government too much power and hurt businesses. Critics also argued that the New Deal programs were too expensive and didn’t fix the economy quickly enough.
FDR's court-packing plan was a proposal to change the U.S. Supreme Court. After the Court ruled against some of his New Deal programs, Roosevelt wanted to increase the number of justices from nine to fifteen so he could appoint more judges who supported his ideas. However, many people were worried that this would give the president too much power and upset the balance of power between the branches of government. Although the plan wasn’t approved, it sparked important debates about how much control the president should have over the courts.
During the New Deal, the role of the federal government changed drastically. Before the Great Depression, the government didn’t play as big a role in people's everyday lives, but FDR’s New Deal programs gave the government more responsibility for helping citizens. Many new programs were created to provide jobs, financial support, and social services, which made people more dependent on the government for assistance. This change gave the federal government a larger role in protecting the economy and ensuring the well-being of its citizens, something that hadn’t been a priority before. While some worried that this could make people too reliant on government help, it also set the stage for the government to play a major role in economic stability and public welfare.Â
Some of President Franklin D. Roosevelt's New Deal programs were declared unconstitutional because the Supreme Court said they took away powers that should belong to the states. For example, the Court ruled that the Agricultural Adjustment Act, which tried to control farm production, went beyond what the federal government is allowed to do according to the Constitution. The Court said that regulating farming was a job for the states, not the federal government, based on the 10th Amendment, which says that any powers not given to the federal government are reserved for the states or the people.
The 22nd Amendment, limits U.S. presidents to two terms in office. It was enacted after Franklin D. Roosevelt served four terms, and many felt it was important to set a limit to prevent any one person from holding too much power for too long.Â