The Great Depression and New Deal Study Pack
Kibin's free study pack on The Great Depression and New Deal includes a 7-section study guide, 25 quiz questions, 30 flashcards, and 5 open-ended Explain review questions. Sign up free to track your progress toward mastery, plus upload your own notes and recordings to create personalized study packs organized by course.
Last updated May 28, 2026
The Great Depression and New Deal Study Guide
Trace the causes and consequences of the Great Depression — from the 1929 crash and structural weaknesses like margin buying and farm debt to FDR's New Deal programs, including the FDIC, Social Security Act, and Wagner Act, and the lasting debate over federal power they sparked.
Key Takeaways
- •The Great Depression began with the stock market crash of October 1929 and deepened through bank failures, collapsing agricultural prices, and a sharp contraction in industrial production, pushing unemployment to roughly 25 percent by 1933.
- •Structural weaknesses in the American economy — including overproduction, farm debt, speculative stock buying on margin, and an unstable banking system — made the economy vulnerable long before the crash.
- •Franklin D. Roosevelt won the 1932 presidential election in a landslide by promising a 'New Deal' for Americans, and his administration responded to the crisis with an unprecedented expansion of federal government intervention in the economy.
- •The First New Deal (1933–1934) focused on emergency relief, banking stabilization, and economic recovery through programs like the FDIC, the AAA, and the CCC.
- •The Second New Deal (1935–1938) shifted toward longer-term reform and economic security, producing landmark legislation including the Social Security Act, the Wagner Act, and the Works Progress Administration.
- •Critics attacked the New Deal from both the left — arguing it did too little to redistribute wealth — and the right — arguing it gave the federal government unconstitutional powers over private enterprise.
- •While the New Deal did not end the Great Depression, it restructured American financial regulation, created the modern social safety net, and permanently expanded the role of the federal government in citizens' economic lives.
Causes and Origins of the Great Depression
The Great Depression did not result from a single event but from a combination of structural economic weaknesses that had been building throughout the 1920s, finally triggered by the stock market collapse of 1929.
Speculative Excess and the Stock Market Crash of 1929
- •Throughout the 1920s, stock prices rose far beyond the actual productive value of companies, fueled by widespread buying on margin — purchasing stocks with borrowed money, often putting up only 10 percent of the price in cash.
- •On October 24, 1929 ('Black Thursday') and October 29, 1929 ('Black Tuesday'), panic selling caused the Dow Jones Industrial Average to lose billions in value within days, wiping out both speculators and ordinary investors.
Agricultural and Industrial Overproduction
- •American farms had produced surplus crops throughout the 1920s, keeping commodity prices low and leaving rural families in debt even before the Depression began.
- •Factories had also outpaced consumer demand; when purchasing slowed, unsold inventories accumulated and employers began laying off workers, further reducing demand in a self-reinforcing cycle.
Banking System Fragility
- •American banks in the 1920s operated without federal deposit insurance, meaning that when nervous depositors initiated bank runs — withdrawing savings simultaneously — banks collapsed and depositors lost everything.
- •Between 1930 and 1933, more than 9,000 American banks failed, destroying the savings of millions of families and contracting the money supply dramatically.
Global Dimensions
- •The Smoot-Hawley Tariff Act of 1930 raised import duties to record levels, prompting retaliatory tariffs from trading partners and collapsing international trade, which deepened the Depression worldwide.
- •European economies, still fragile after World War I, were hit especially hard, and their decline fed back into U.S. export losses.
Human Consequences: Life During the Depression
The economic statistics of the Great Depression — a 25 percent unemployment rate, a 50 percent drop in industrial output by 1932 — translated into concrete suffering that reshaped American social and cultural life.
Unemployment and Poverty
- •By 1933, approximately 13 to 15 million Americans were out of work; many who remained employed faced drastically reduced hours and wages.
- •Families lost homes and farms to foreclosure; makeshift shantytowns called 'Hoovervilles' appeared in cities across the country, named sarcastically after President Herbert Hoover.
The Dust Bowl and Rural Displacement
- •Severe drought and decades of over-plowing stripped the topsoil of the southern Great Plains, causing massive dust storms — the worst in 1935 and 1936 — that destroyed crops and forced roughly 300,000 migrants, many from Oklahoma and Arkansas, to flee westward.
- •These migrants, derisively called 'Okies,' faced hostility in California and elsewhere as local residents blamed them for competing for scarce jobs.
Racial and Gender Disparities
- •African Americans faced unemployment rates two to three times higher than white Americans, were frequently excluded from federal relief programs through local administration of funds, and continued to endure racial violence and disenfranchisement.
- •Mexican Americans and Mexican immigrants faced mass deportation campaigns, with an estimated 400,000 to 500,000 people forcibly or coercively returned to Mexico during the 1930s regardless of citizenship status.
- •Women who worked for wages faced social stigma and were frequently fired first, while those who stayed home managed family survival through subsistence strategies like canning food and sewing clothing.
Cultural and Psychological Toll
- •Suicide rates, stress-related illness, and family dissolution increased; many men who had defined themselves through breadwinning experienced shame and psychological crisis when unable to find work.
- •Popular culture — radio programs, Hollywood films, and cheap novels — served as both escape and reflection of Depression-era anxieties and longing for normalcy.
Herbert Hoover's Response and the Election of 1932
President Herbert Hoover's handling of the Depression, shaped by his belief in voluntary cooperation and limited federal intervention, proved inadequate to the scale of the crisis and opened the way for Franklin Roosevelt's decisive electoral victory.
Hoover's Philosophy and Policy Limits
- •Hoover believed that direct federal relief payments to individuals would undermine self-reliance and create dependency; he preferred encouraging voluntary charity and business cooperation.
- •He did sign the Revenue Act of 1932, raising taxes to balance the budget — a move that economists now widely regard as having worsened the Depression by reducing consumer spending during a downturn.
- •The Reconstruction Finance Corporation (RFC), created in 1932, lent money to banks and large businesses, but its benefits flowed to institutions rather than unemployed individuals, doing little to restore consumer confidence or spending.
The Bonus Army
- •In the summer of 1932, roughly 20,000 World War I veterans marched on Washington to demand early payment of a service bonus scheduled for 1945; Hoover ordered the U.S. Army under General Douglas MacArthur to disperse them.
- •MacArthur used cavalry, tanks, and tear gas to drive the veterans and their families from their camp, an action that horrified much of the public and made Hoover appear callous.
Franklin Roosevelt's Campaign and Election
- •Franklin D. Roosevelt, the governor of New York, won the Democratic nomination in 1932 and campaigned on a vague but energizing promise of a 'New Deal' for Americans, projecting optimism and confidence.
- •Roosevelt won 57 percent of the popular vote and carried 42 of 48 states; his victory represented a decisive repudiation of Republican economic policy and a mandate for aggressive federal action.
The First New Deal: Emergency Measures and Recovery Programs (1933–1934)
Roosevelt's first hundred days in office produced a torrent of legislation aimed at stabilizing banks, providing emergency relief, and stimulating economic recovery — a phase historians call the First New Deal.
Banking Stabilization
- •Roosevelt declared a four-day national bank holiday immediately upon taking office in March 1933, halting all banking transactions while Congress passed the Emergency Banking Act, which gave the Treasury Department authority to inspect and reopen only solvent banks.
- •The Glass-Steagall Act of 1933 separated commercial banking from investment banking and created the Federal Deposit Insurance Corporation (FDIC), which insured individual deposits and ended the threat of bank runs by guaranteeing depositors' money.
Agricultural Adjustment
- •The Agricultural Adjustment Act (AAA) of 1933 paid farmers to reduce crop and livestock production, deliberately creating scarcity to drive up commodity prices and restore farm income.
- •The AAA was controversial: while it helped commercial farmers, it harmed tenant farmers and sharecroppers — disproportionately Black in the South — who were pushed off the land when landlords reduced planted acreage.
Industrial Recovery Efforts
- •The National Industrial Recovery Act (NIRA) created the National Recovery Administration (NRA), which allowed industries to set minimum prices and wages through voluntary codes of competition, temporarily suspending antitrust law.
- •The NRA codes were largely unenforceable and favored large businesses over small competitors; the Supreme Court struck down the NIRA as unconstitutional in Schechter Poultry Corp. v. United States (1935).
Relief and Conservation Programs
- •The Federal Emergency Relief Administration (FERA) distributed $500 million in direct relief to states, representing the first time the federal government provided direct assistance to unemployed individuals.
- •The Civilian Conservation Corps (CCC) employed young men in reforestation, soil conservation, and park construction projects, paying them $30 per month with $25 required to be sent home to families.
- •The Civil Works Administration (CWA), launched in late 1933, quickly employed 4 million people in public construction projects but was terminated by Roosevelt in 1934 over concerns about costs and dependency.
Unlock the rest of this study guide
- Access the full study pack
- Track your mastery and be test-day ready
- Upload your own notes to build personalized study guides, quizzes, flashcards, and more
About this Study Pack
Created by Kibin to help students review key concepts, prepare for exams, and study more effectively. This Study Pack was checked for accuracy and curriculum alignment using authoritative educational sources. See sources below.
Sources
Question 1 of 25
Your progress is saved after each question and counts toward mastery.
What specific practice fueled speculative excess in the stock market during the 1920s, where investors could purchase stocks by putting up only 10 percent of the price in cash?
Card 1 of 30
Your progress is saved after each card and counts toward mastery.
Concept 1 of 5
Your progress is saved after each concept and counts toward mastery.
Structural Causes of the Great Depression
Explain the structural weaknesses in the American economy that made the Great Depression possible. Why was the stock market crash of 1929 a trigger rather than the sole cause, and what other factors combined to deepen the crisis?
More in US History
See all topics →Abolitionism and Antislavery Movements
Trace the rise of radical abolitionism from Garrison's Liberator to the activism of Douglass, Walker, and Truth — covering moral arguments, movement fractures, and the central role enslaved people played in dismantling slavery.
An Awakening of Religion and Individualism
Trace the spiritual and philosophical upheaval reshaping antebellum America — from Finney's revival techniques and the Second Great Awakening to Emerson's Transcendentalism, utopian communities, and the Millerite Great Disappointment — and how each fueled a rising culture of individualism.
Antebellum Reform Movements
Trace the interconnected reform impulses of antebellum America — from the Second Great Awakening and temperance crusades to Garrisonian abolitionism, Seneca Falls, and Dorothea Dix's asylum reforms — and understand how perfectionist ideals reshaped politics and society before the Civil.
Articles of Confederation
Examine the strengths and fatal weaknesses of America's first national government, from Congress's inability to tax or regulate commerce to Shays' Rebellion, and see why the Articles were scrapped for the Constitution.
Causes of the American Revolution
Trace the breaking point between Britain and its American colonies — from French and Indian War debts and the Stamp Act to the Boston Massacre and Intolerable Acts — and master the taxation disputes, colonial resistance, and Enlightenment ideals that made revolution inevitable.
Civil Rights Movement
Trace the Civil Rights Movement from Brown v. Board to the Voting Rights Act of 1965, covering nonviolent tactics, key organizations like the SNCC and SCLC, landmark legislation, and the rise of Black Power as debates over equality intensified.
Civil War Causes and Turning Points
Trace the Civil War from its root causes — sectional conflict, slavery's expansion, and the collapse of compromise — through the turning points at Gettysburg and Vicksburg, Grant's total war strategy, and the 13th Amendment's constitutional revolution.
Colonial Society in British North America
Examine the social hierarchies, regional economies, and legal structures that shaped British North America — from chattel slavery and coverture to the Great Awakening and colonial self-governance — and sharpen your grasp of the forces that defined colonial life before the Revolution.
Constitutional Convention Debates
Unpack the key clashes that shaped the U.S. Constitution — from the Virginia and New Jersey Plans to the Three-Fifths Compromise — and trace how Federalist and Anti-Federalist debates over power, representation, and rights drove ratification.
European Exploration and the Columbian Exchange
Trace the far-reaching consequences of Europe's transatlantic voyages, from Spain and Portugal's conquest-driven colonization to the two-way transfer of crops, diseases, and enslaved peoples that reshaped ecosystems and populations on every continent.