Great Depression and New Deal Overview
Great Depression and New Deal Overview
History
The Great Depression and New Deal
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The Great Depression and the New Deal
This guide is designed to help you understand and analyze the causes and effects of the Great
Depression along with the policies implemented to bring an end to the economic crisis. To begin our look
at this era of history, let’s start with your opinion on the role the government should play in the economy.
Read the statement concerning the role of the government in the U.S. economy. Mark the
continuum with your initials in the place that best represents your opinion. (Do not mark the
center.)
The Great Depression of the 1930s was characterized by bank and business failures and high
unemployment. Even the agricultural sector was not immune as a severe drought and dust storms, known
as the Dust Bowl, hit the Midwest. The New Deal was President Franklin Roosevelt’s program to address
the problems of the Depression. He focused on economic relief to the unemployed by providing jobs
through government work projects. His focus on recovery created programs to stimulate the economy and
increase production because factories had stopped producing goods in many cases. This also included a
jobs program for individuals that would allow them to purchase items with their salary, resulting in an
increased demand for production. Finally, the president sought to reform the parts of the economy that
led to the Depression, including the banking industry. Critics of the New Deal believed this legislation
expanded the power of the executive too much. They also believed it gave the federal government too
much power to regulate private business and free enterprise.
After reading the characteristics of the Great Depression and New Deal era,
2.
3.
Two individuals had different points of view concerning the role of government in responding to the Great
Depression. Both served as President of the United States; Herbert Hoover served from 1929 to 1933
and Franklin D. Roosevelt from 1933 to 1945.
As you read the short biographies and quotes by both men, highlight their key ideas about
the role the government should play in the economy during the Great Depression.
When the economic crisis deepened and the economy failed to rebound,
“I would like to state to youhe cut taxes, increased federal spending on public projects, and began
the effect that…[an]buying surplus farm crops. The Hoover Dam was an example of a
interference of government public project. It was one of the largest man-made dams in the
in business would have upon
nation. Built between Nevada and Arizona, it created a massive man-
our system of self-
government and ourmade lake for irrigation, flood control, and electric power in one of the
economic system. Thatdriest areas in the nation. Hoover also attempted to provide low-
effect would reach to the interest loans to small businesses and banks. He hoped by providing
daily life of every man and relief to these groups, the effects of increased business would “trickle
woman. It would impair the
very basis of liberty and down” to the average American. Most felt this was not enough, and he
freedom…” was soundly defeated by the Democratic candidate, Franklin D.
Roosevelt, in the 1932 election. Hoover retired from public office until
he was asked by Democratic president, Harry S. Truman, to oversee
Herbert Hoover, 1932 the Hoover Commission. The Commission was responsible for
Campaign reorganizing the executive departments and determining the food needs
of Europe, especially in American and British occupied Germany
following World War II.
When Roosevelt was elected president in 1932, the nation was in the
“The country needs and, unless I grips of the Great Depression. Unemployment was as high as 25%
mistake its temper, the country
at its peak. Faced with the fact that several states were financially
demands bold, persistent
experimentation. It is common ruined and several more were on the brink, Roosevelt was told by
sense to take a method and try the outgoing Secretary of the Treasury the night before his
it. If it fails, admit it frankly and inauguration, that he might be the last president of the United
try another. But above all, try States. Roosevelt changed his speech, delivering instead one of
something.”
the most famous inaugural
Franklin D. Roosevelt, 1932 addresses in presidential 1932 Ballot
history. In the address, he Herbert Hoover
attempted to bolster the American public with the famous line, “The
only thing we have to fear, is fear itself.” Franklin Roosevelt
He began to develop programs known as the New Deal to help the
American economy by providing relief, reform, and recovery. This led The reason for my vote is..
to a significant expansion of the power of the executive
branch. Opposition to this growth resulted in constitutional challenges
in the Supreme Court. When the Supreme Court declared several New
Deal laws unconstitutional, Roosevelt responded by trying to increase
the number of justices on the Supreme Court. This became known as
“Court Packing.” He hoped the new justices would change the vote in
his favor. Roosevelt’s plan was rejected because there were signs of
economic recovery and the country’s attention was turning toward the
growing threat of totalitarian governments, especially Nazi
Germany. (NOTE—the last years of Roosevelt’s presidency will be
addressed with World War II.)
By 1933, 13 million Americans—25% of the workforce were out of work. Those who were able to keep
their jobs often took pay cuts of one-third or more. By 1931, one-third of the banks failed. Factories
ground to a halt as the need for their products dropped. Farmers in the Midwest suffered a terrible
drought which devastated their crops. This was the most serious economic crisis in United States
history.
To understand this critical period, read the long term causes of the Great Depression and
then make an inference about what you think or wonder by predicting what might happen as
a result of each.
After you finish, rank the five causes with 1 being the most significant and 5 being the least
and record your choices in the space provided.
To understand this critical period, read the long term causes of the Great Depression and
then make an inference about what you think or wonder by predicting what might happen as
a result of each.
Rank the five causes with 1 being the most significant and 5 being the least and record your
choices in the space provided.
During the month of October, 1929 stock prices began to fall and stockholders began to sell. On October
29, 1929 also called “Black Tuesday,” the stock market crashed. Within days, fortunes were wiped out
almost overnight and the nation began a rapid descent into the Great Depression.
A. Industrial Problems
B. Uneven distribution of income
C. Unstable banking practices
D. Weak international economy
E. Monetary Policy and use of the Gold Standard
As you read the short term effects, match each to one of the five major causes you feel was
most responsible.
_____ 3, In the first two years following the crash, over 50,000 businesses failed.
_____ 4, Unemployment rose to 25% and the percentage was even higher in the major industrial
cities such as Chicago.
_____ 5. Total wages for those that kept their jobs dropped from $12 billion to 7 billion.
_____ 8. Approximately ⅓ of the nation’s farmers lost their land when they were crippled by the
drought, low food prices and the inability to pay loans.
_____ 9. Immigrant factory and farm workers, especially those from Mexico, were targets of
hostility and prejudice.
[Link] public works projects provided employment along with much needed internal improvements
such as dams, highways, bridges, and public buildings. Many of these improvements are still
standing today.
2. The power of the federal government increased significantly due to government regulations and new
taxes to support the economy.
3. The Treasury changed to a fiat or paper currency system rather than the gold/silver standard to
back U.S. money and increase the money supply.
4. Federal agencies such as FDIC and the SEC were established to be a watchdog over banks and
the stock market.
5. The federal government instituted programs such as Social Security insurance, farm subsidies, and
the idea of a minimum wage to provide a “safety net” for Americans.
6. A shift in the relationship between the federal government and the states when the federal
government became more directly involved in the lives of individuals.
7. The worldwide depression led to the rise of extremist ideologies in European countries such as
Spain, Italy, and Germany.
Using your analysis of the causes and effects of the Great Depression, complete the
following summary.
The __________________ was the catalyst that began the Great Depression. The two most important
causes that contributed to the Great Depression were (1) ____________________________ because
because_________________________________________________________________________.
because_____________________________________________.
The long term effect that has had the most significant impact is ____________________________
because___________________________________.
Set One
Term:
Set Two
Term:
This era produced one of America's greatest novels, The Grapes of Wrath, by John Steinbeck, published
in 1939. His novel was based on the lives of workers, he called” Oakies,” who had migrated from
Oklahoma during the Dust Bowl to California to find work. NOTE—It is estimated that over one million
farmers lost their land and left searching for a better opportunity.
Read the following quotes from the novel and explain what you think it means and how it
characterizes the Great Depression.
1. “...and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing
wrath. In the souls of the people the grapes of wrath are filling and growing heavy for the
vintage.” — John Steinbeck, The Grapes of Wrath
2. “ ‘ Sure,’ cried the tenant men, ‘but it’s our land...We were born on it, and we got killed on it, died on
it. Even if it’s no good it’s still ours...That’s what makes ownership, not a paper with numbers on
it.’” — John Steinbeck, The Grapes of Wrath
3. “ We’re sorry. It’s not us. It’s the monster. The bank isn’t like a man.”
“Yes, but the bank is only made of men.”
“No, you’re wrong there--quite wrong there. The bank is something else than men. It
happens that every man in a bank hates what the bank does, and yet the bank does it. The bank
is something more than men, I tell you. It’s the monster. Men made it, but they can’t control
it.” — John Steinbeck, The Grapes of Wrath
4. “One man, one family driven from the land; this rusty car creaking along the highway to the west. I
lost my land, a single tractor took my land. I am alone and bewildered. And in the night one family
camps in a ditch and another family pulls in and the tents come out. The two men squat on their
hams and the women and children listen. Here is the node, you who hate change and fear
revolution. Keep these two squatting men apart; make them hate, fear, suspect each other.” —
John Steinbeck, The Grapes of Wrath
5. “The works of the roots of the vines, of the trees, must be destroyed to keep up the price...Carloads
of oranges dumped on the ground. The people came for miles to take the fruit, but this could not
be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them
up?...A million people hungry, needing the fruit and kerosene sprayed over the golden
mountains...Burn coffee for fuel in ships. Burn corn to keep war, it makes a hot fire.. Dump
potatoes in the rivers and place guards along the banks to keep the hungry people from fishing
them out.” — John Steinbeck, The Grapes of Wrath
In 1932 Yip Harburg wrote a song that symbolized the feelings and frustration of the people in the Great
Depression. This song often played on the radio and became one of the most popular songs in 1932.
As you read the words of the three stanzas of “Brother, Can You Spare a Dime?” consider
what message Harburg was trying to convey.
In conclusion, what was Harburg trying to say? Why do you think this song became so
popular?
Finally, study this iconic photograph of a young mother with seven children from the Great Depression.
After his inauguration, President Franklin D. Roosevelt announced plans or a “New Deal” for a series of
programs designed to help end the depression gripping the nation. They consisted of relief programs
which provided relief for people affected by the depression until the economy stabilized; recovery
programs designed to stimulate the economy; and reform programs to prevent future economic problems
such as those that had caused the depression. The programs, often called the Alphabet Soup because
they were known by the initials of the program, fit one of these three categories.
Read about each program and then decide if it is a relief, recovery, or reform program and
explain why it fits into that category.
CCC
This program put young men to work
Civilian
building roads, parks, and helping in
Conservation
erosion control projects.
Corps
NIRA
This established the National Recovery Ad-
National
ministration which had the power to set
Industrial
rules and regulations for the economy.
Recovery Act
SEC
This regulated the stock market and
Securities and
restricted the practice of buying on margin.
Exchange
.
Commission
NLRB
National Labor This allowed workers to join unions and
Relations Board prevented management from outlawing un-
(also known as the ions.
Wagner Act)
As Roosevelt’s programs took effect, many conservatives began to question whether the New Deal
programs overstepped the powers given to the federal government in the U.S. Constitution, especially
those given to the executive branch. In the first hundred days of his administration, President Roosevelt
sent measure after measure to Congress, and his bills met with little organized opposition in either
house. The executive and legislative branches worked cooperatively to make changes to the American
economy. The third branch of government, the judiciary, did not have an opportunity to become involved
in the New Deal until the middle of Roosevelt’s first term. Since the Supreme Court only hears actual
cases and controversies, the people had to wait until a person with ‘standing to sue’ challenged a New
Deal law before anyone could know whether the Court would uphold the new laws.
In the winter of 1934-35, the answers to the questions of whether the New Deal was a radical and
unconstitutional departure from traditional governmental involvement in the economy began to come. The
Supreme Court approved parts of the New Deal but struck down many important New Deal measures. The
National Industrial Recovery Act, The Agricultural Adjustment Act, and attempts from both federal and
state attempts to establish minimum wages were declared unconstitutional. Never before had a Supreme
Court majority taken on almost the entire governmental program of a powerful president whom Congress
solidly backed and vetoed the program law by law. The Court showed the President and Congress what a
powerful check judicial review could be.
These decisions became a key issue during the presidential election campaign in 1936. Republicans
defended the Court’s recent decisions and the Democrats argued the Supreme Court’s interpretation was
fit for “horse and buggy times, not today’s economic crisis.” Most Americans widely accepted the New
Deal. As a result, President Roosevelt won every state’s electoral vote except Vermont and Maine and
defeated the Republican candidate, Alfred Landon, by more than 10 million votes.
Roosevelt interpreted his landslide victory as a mandate for further reforms. With his personal popularity
and prestige, and his huge congressional majorities, only the Supreme Court appeared to stand in his way.
Most presidents can influence the Court through their appointments, but during Roosevelt’s first five years
in office not one justice died or retired. Roosevelt was confident that the people approved of his policies,
but would they approve of his efforts to restructure the Supreme Court?
Just two weeks after his second inaugural speech, Roosevelt sent a proposal to Congress. Its support-
ers called it a “court reform” measure, while its opponents called it an effort to “pack the court.” Simply
stated, Roosevelt’s bill provided that whenever a federal judge who had served ten years or more
failed to retire within six months after reaching his seventieth birthday, the President could appoint an
additional judge. This additional judge would be assigned to the same court on which the older jurist
was serving. No more than fifty such additional judges could be added to the entire federal judicial sys-
tem, and the maximum number of Supreme Court justices was set at fifteen.
The Supreme Court was frequently characterized as the “Nine Old Men.” In 1937 it was an accurate, if
unflattering, description. The youngest justice was 62; the oldest, 81. All four of the justices who had
regularly voted against New Deal measures were over 70. The intended effect of Roosevelt’s court
proposal was obvious even if the President emphasized other reasons for supporting his bill.
Study the editorial cartoon below. Then, answer the questions that follow.
4. How does the cartoon illustrate the idea of separation of powers with the three branches of
government?
Review the New Deal programs (on pages 17 and 18) and consider the categories you
identified for each: Relief, Recover, or Reform.
For each of these categories identify the program you feel would have been the most
effective and explain why.
Relief
Recovery
Reform
Refer back to your answer on the continuum at the beginning of the study. Mark the
place on the continuum that now reflects your position on the statement and explain
if and how your opinion has changed.
What connections do you see with the causes and effects of the Great Depression to the political,
social, or economic problems of today?
Is the coronavirus aid packet an example of relief, recovery, or reform? Explain your answer.