Hoover signed the Smoot-Hawley Tariff Act, which raised taxes on 900 imports. It originally was supposed to help farmers but ended up imposing tariffs on hundreds of other products. Other countries retaliated, setting off a trade war. It was the first of what was later called the Dust Bowl drought.
Bank of the US Failed!
December 11, 1930
The Bank of the United States failed. It was the fourth-largest bank in the nation and the largest bank failure in history at that time. Worried about budget deficits, Hoover returned the top income tax rate to 25%. The economy shrank 8.5%. The unemployment rate rose to 8.7%. Deflation set in as prices fell 6.4%.
Revenue Act of 1932
June 6, 1932
Hoover signed the Revenue Act of 1932. It increased the top income tax rate to 63%. He wanted to reduce the federal deficit. Hoover believed it would also restore confidence. Instead, higher taxes worsened the Depression.
March 9, 1933
Franklin Delano Roosevelt launched the New Deal with the Emergency Banking Act. It closed all U.S. banks to stop devastating failures.
Federal Housing Administration
June 27, 1934
The Federal Housing Administration provided federal mortgage insurance. The Securities and Exchange Commission regulated the stock market. The FCC consolidated all federal regulation of telephone, telegraph, and radio communications.
April 14, 1935
Black Sunday was the worst dust storm ever. FDR passed the Soil Conservation Act to teach farmers sustainable methods.
Back into the Depression
FDR cut spending to reduce the debt. That cutback in New Deal spending pushed the economy back into the Depression. FDR pushed Congress to enact a $5 billion relief program. It included the Federal National Mortgage Association that resold mortgages on the secondary market. The New Agricultural Adjustment Act remedied the 1933 AAA. The Fair Labor Standards Act established the U.S. minimum wage, overtime pay, and youth employment standards.
The Great Depression is over.
The economy started to grow again. The Great Depression was over.
For the year, the economy shrank 3.3%. Unemployment rose to 19%. Prices fell 2.8%. The debt remained steady at $37 billion.
Hitler conquered France and bombed London. The United States began sending arms to Britain. Congress reinstated the military draft. FDR increased the defense budget and raised the top income tax rate to 81%. The economy grew by 8.8%. Unemployment fell to 14.6%. Prices crept up 0.7%. The debt rose to $51 billion.
Japan attacked the Pearl Harbor Navy base.
December 7, 1941
Japan attacked the Pearl Harbor Navy base. Congress declared war on Japan. The economy grew 17.7%, unemployment plummeted to 9.9%, and prices rose 9.9%. The debt grew to $58 billion. In total, FDR created the greatest percentage increase in U.S. debt by a president.