Howard Pyle, The Burning of Jamestown, an early-twentieth-century illustration, not an eyewitness view. Public domain.
In 1937 an economy that had been climbing dropped again after Washington tightened its budget and the Federal Reserve raised the reserves banks had to hold.
A stretched household that had just gotten a project job or a factory job could lose it and be back at the relief office.
A household that had started to believe the worst was past put off the purchase and watched hours get cut.
A business that had begun to restock cut orders, and a bank sitting on higher required reserves had less room to lend just as customers grew careful.
Social Security taxes were being collected before retirement benefits were being paid, the bonus spending had passed, and the administration was trying to move the budget toward balance.
At the same time the Federal Reserve raised reserve requirements.
Production fell and unemployment rose, and a recovery printed in the newspaper could still take the job back.
Friedman and Schwartz, A Monetary History of the United States (1963); Kennedy, Freedom from Fear (1999)