The Great Depression

The Great Depression: An AP US History Study Guide

Welcome, APUSH enthusiasts! 🕵️‍♂️ Get ready to dive into one of the most intense periods of American history—the Great Depression. Imagine a time when the economy was as fragile as your grandma's famous porcelain teapot, and people were learning how to dance with despair. It’s time to explore how the roaring twenties dovetailed into a dramatic economic downturn, leaving nothing but dust and dreams in its wake.

The Great Depression, starting in 1929, holds the unenviable title of the worst economic disaster in U.S. history. It brought sky-high unemployment rates, peaking at nearly 25%, and left many Americans scrambling for ways to support themselves and their families. Think of it as the ultimate bad hair day but for the economy—except it lasted for over a decade. 😳

The causes of the Great Depression can be summarized with the word “BOOM!”—but not in a good way. Here’s a break down of the contributing factors:

B – Bank Failures: When a bank runs out of money because everyone is pounding on the vault, trying to withdraw their savings all at once. The lack of regulation left the banks as vulnerable as a kid with a slingshot against Godzilla.

O – Overproduction: Companies and farmers were cranking out goods like it was going out of style (because it kinda was). After World War I ended, they kept producing at wartime levels. But selling a thousand toasters doesn’t help if you’ve run out of bread to put in them.

P – Purchasing Reduction: Consumers stopped buying as much. You might enjoy shopping, but even back then, folks knew when to tighten their belts—mainly because their wallets were empty.

S – Stock Market Crash: In 1929, the stock market crash was like Wile E. Coyote finally plummeting after running off the cliff. The bubble burst, and the economy went "splat."

The causes of the Great Depression have been a topic of debate for years. While some factors are agreed upon, others, like the role of the Federal Reserve, are still discussed passionately by economic historians (yes, they’re a real and very passionate bunch).

The 1920s were known as the "Roaring 20s," a period of champagne and confetti, but this party ended with an epic crash. Unregulated credit let people buy on borrowed money, and margin-buying (buying stocks on credit) led to a market built on a house of cards.

Imagine betting your friend’s lunch money on a carnival game, hoping to double it, only to walk away with nothing but a sad, empty wallet. By 1929, this economic house of cards fell on "Black Tuesday," October 29, leading to widespread stock failures and panic sells. It was worse than forgetting your locker combination on the first day of school, significantly worse.

By 1933, the unemployment rate had hit an astronomical 25%, meaning approximately 13 million people were out of jobs, desperately searching for any means to support themselves and their families.

A run on the banks—cue the dramatic music—is when everyone rushes to withdraw their money after hearing rumors that their bank might be as solid as a soggy cardboard box.

During the Great Depression, risky loans and a lack of regulation meant that when customers did this, banks simply couldn't handle it. By 1933, 28 states were left without a single functioning bank! Remember, banks don’t just store your bills in neat stacks; they invest and lend out most of your deposits, leaving a small fraction in reserve. When everyone wanted their money at once, these banks couldn’t cough it up, saying, “Sorry, spent it all!”

Bank failures eroded trust in the financial system, which is never a good look. Businesses couldn’t get loans, people lost savings, and the economy essentially said, "Game Over."

Adding to the misery, the Dust Bowl—an environmental calamity—struck the American West. With poor soil management and drought conditions, high winds turned fields into dust clouds. Families were forced to pack up and move, often to California, earning the nickname "Okies."

Imagine "Wizard of Oz"-level dust storms, but without the singing munchkins. Yeah, it was that bad. Farmers who had already been struggling now had to watch their land erode into the wind, leaving many homeless and jobless.

President Herbert Hoover found himself in the hot seat as the economy tanked faster than a lead balloon. The Federal Reserve tightened the money supply (thinking, "let’s make money even harder to get—sounds genius, right?"), and the Hawley-Smoot Tariff escalated into an all-out trade war, freezing global trade like a glacier in July.

Hoover tried limited public works and urged businesses not to cut wages and unions not to strike. His reluctance to provide federal relief, preferring state and local government interventions, made him less liked than a homework assignment on a sunny day. The ultimate slap in the face? Shantytowns of the homeless were mock-named “Hoovervilles.”

As the situation worsened, unemployment lines grew, veteran protests like the "Bonus March" erupted, and boxcar travel became a grim way of life for the displaced.

In the election of 1932, Americans were ready for a change of pace, kind of like switching from dial-up to fiber optics. Democratic candidate Franklin Delano Roosevelt (FDR), a cousin of Teddy Roosevelt, swept into office with promises of bold action.

In his first inaugural address, he famously declared, “The only thing we have to fear is fear itself,” effectively channeling the optimism of a motivational meme. 🦸‍♂️

FDR hit the ground running with his "First Hundred Days," pushing through legislation like a student cramming for finals. These initiatives, known collectively as the "New Deal," aimed to alleviate the Great Depression’s grim realities.

1. Bank Failures: When a bank can't meet obligations to depositors because it's out of money.
2. Black Tuesday: October 29, 1929—when the stock market hit rock bottom.
3. Bonus March: A protest by WWI veterans in 1932 for early payment of their promised bonuses.
4. Dow Jones Industrial Average: A stock market index for measuring stock performance of major companies.
5. Dust Bowl: Environmental disaster in the Midwest during the 1930s due to poor farming practices and drought.
6. Federal Reserve: America's central bank, founded in 1913 to stabilize the financial system.
7. First Hundred Days: The start of FDR's presidency, marked by rapid legislative activity.
8. Franklin Delano Roosevelt (FDR): U.S. president who led the country through the Great Depression with his New Deal.
9. Great Depression: The severe worldwide economic crisis of the 1930s.
10. Hawley-Smoot Tariff: 1930 law raising U.S. import duties, worsening the Depression by stifling trade.
11. Herbert Hoover: U.S. president at the Depression’s start, widely blamed for ineffective crisis management.
12. Hoovervilles: Shantytowns named mockingly after President Hoover.
13. Milton Friedman: Economist who critiqued the Federal Reserve’s role in exacerbating the Depression.
14. New Deal: FDR’s series of programs aimed at economic recovery.
15. Okies: Migrants from the Dust Bowl, especially from Oklahoma, seeking jobs in California.
16. Overproduction: Producing more goods than the market can absorb, a key factor in the Depression.
17. Public Works: Government-funded projects like roads and parks to provide jobs and infrastructure.
18. Purchasing Reduction: The decline in consumer buying.
19. Run on the Banks: Rush by depositors to withdraw funds, leading to bank collapses.
20. Stock Market Crash: The drastic fall of stock prices in October 1929.

And there you have it! The Great Depression was a time when America’s economy had to face the music, and it wasn’t playing a happy tune. Understanding this period is crucial not just for rocking your APUSH exam but also for realizing the resilience and innovation that can emerge from times of crisis.

Now go forth, armed with knowledge and maybe a bit of humor, and ace that exam! 🎓💪