Unit 5 Study Guide: Great Depression & New Deal

The Great Depression Causes

Years: 1929-1941

Immediate: Stock market crash of 1929

Long Term: Overproduction, uneven distribution of wealth, buying on credit, weak banking systems

The Great Depression Effects

Years: 1929-1941

Immediate: Massive unemployment, bank failures, business closures

Long Term: Expanded role of federal government, creation of social safety nets, long lasting economic reforms

The New Deal Causes

Need for government action to relive unemployment and restore the economy

The New Deal Effects

Immediate: Relief programs for the jobless, banks reforms, public works project

Long Term: Social security stronger financial regulations, larger federal role in the economy

Herbert Hoover Approach towards problems during the Great Depression

Political Party: Republican

Years in Office: 1929-1933

Believed in limited government, relied on voluntary cooperation and local charities, hesitant to give direct federal aid 

Herbert Hoover Successes/Failures

Political Party: Republican

Years in Office: 1929-1933

Largely seen as unsuccessful, policies were too limited to stop the Depression

Franklin Delano Roosevelt (FDR) Approach towards problems during the Great Depression

Political Party: Democrat

Years in Office: 1933-1945

Active government intervention, created New Deal programs, focused on relief, recovery, and reform

Franklin Delano Roosevelt (FDR) Successes/Failures

Political Party: Democrat

Years in Office: 1933-1945

Restored public confidence, reduced unemployment, created lasting reforms, didn’t fully end the Depression (WWII did)

Stock Market Crash of 1929 Causes

Immediate: Over speculation and panic spending

Long Term: Buying on margin uneven wealth distribution, weak banking system

Stock Market Crash of 1929 Effects

Immediate: Massive loss of wealth and bank failures

Long Term: Great Depression and major government economic reforms

The Dust Bowl Causes

Natural Causes: severe drought and high winds

Human Causes: Over farming, removing natural grasses, poor soil conservation

The Dust Bowl Effects

Mass migration (especially to California), farm failures, and environmental reform programs

Ratification of the 21st Amendment Causes

Failures of prohibition; rise of illegal alcohol and crime

Ratification of the 21st Amendment Effects

Legalized alcohol again and increased tax revenue

Mexican Repatriation Act Causes

President: Herbert Hoover 

Desire to free jobs during the Depression; anti-immigrant sentiment

Mexican Repatriation Act Effects

President: Herbert Hoover

Hundreds of thousands of Mexican Americans deported or pressured to leave

Smoot Hawley Tariff Causes

Attempt to protect the U.S. industries with high tariffs

Smoot Hawley Tariff Effects

Other nations retaliated → world trade collapsed → worsened the Depression

FDR’s Fireside Chats Causes

Need to restore public trust during the banking crisis

FDR’s Fireside Chats Effects

Increased confidence in government and support for the New Deal programs

FDR’s Court Packing Plan Causes

Supreme Court striking down New Deal laws

FDR’s Court Packing Plan Effects

Plan failed but pressured the court; public saw it as executive overreach

Speculation buying 

Definition and Relation to Great Depression

Definition: Risky investing hoping prices rise

Relation: Helped inflate the stock market bubble that burst in 1929

Buying stocks on margin

Definition and Relation to Great Depression

Definition: Buying stock with borrowed money

Relation: Caused huge debt and panic selling when prices fell

Laissez-fiare government

Definition and Relation to Great Depression

Definition: Government takes a “hands -off” approach to business

Relation: Allowed risky banking and investing with little regulation

Relief, Recovery, Reform

Definition and Relation to Great Depression

Definition: The three goals of the New Deal

Relation: Programs to help people immediately, fix the economy, and prevent future depressions

Grapes of Wrath novel

Definition and Relation to Great Depression

Definition: Book about Dust Bowls family forced to migrate

Relation: Showed hardships of farmers and suffering during the Great Depression