The Great Depression and the New Deal: flashcards, quiz and summary

Flashcards

1. 1What were the main causes of the Great Depression that existed before the 1929 crash?

   Overproduction, buying on margin and buying on credit, unequal wealth, and weak banks with risky loans and no deposit insurance were all weaknesses before the crash.

2. 2Why did the 1929 stock market crash lead to so much damage?

   The crash wiped out savings and confidence, and it exposed weaknesses that were already there. Bank runs followed, and thousands of banks failed from 1930 to 1933.

3. 3How did Hoover's approach to the Depression differ from Roosevelt's?

   Hoover favored voluntary action by business and loans to banks and big businesses, and he opposed direct federal relief to individuals. Roosevelt used federal programs to give direct relief to people, restart the economy and reform it.

4. 4What were the three Rs of the New Deal, and what did each mean?

   Relief meant helping jobless people right away. Recovery meant restarting the economy. Reform meant changing the system to prevent another depression.

5. 5What did the First New Deal try to fix in banking and the stock market?

   The Emergency Banking Act let only sound banks reopen after a bank holiday. The FDIC insured bank deposits, and the SEC regulated the stock market.

6. 6Why did the Second New Deal focus on jobs, retirement and workers' rights?

   The Second New Deal responded to continued unemployment and hardship. The WPA created millions of jobs, Social Security gave retirement pensions and unemployment insurance, and the Wagner Act protected the right to unionize.

7. 7Why did the Supreme Court's rulings matter for the New Deal?

   The Court struck down the NIRA in 1935 and the AAA in 1936, which limited New Deal programs. This conflict led to Roosevelt's 1937 court-packing plan.

8. 8How did the New Deal change the role of the federal government in the economy?

   The New Deal greatly expanded the federal role in the economy. Lasting programs such as Social Security, the FDIC and the SEC remain part of American life.

9. 9Why is the record of the New Deal still debated?

   Supporters credit it with relief, reform and partial recovery. Critics argue it slowed recovery or did not go far enough, and some on the left and right said it did too little or too much.

10. 10How did the Great Depression finally end?

    After a relapse in 1937 and 1938, massive World War II spending and the draft ended mass unemployment by the early 1940s.

Practice quiz

Pick an answer to check it.

1. 1Which combination best explains why the 1929 crash led to such deep damage?

   1. Weak banks, unequal wealth and overproduction created weaknesses that the crash exposed.
   2. Hoover's New Deal programs raised unemployment after 1929.
   3. Foreign wars reduced American demand for goods.
   4. The crash alone wiped out the whole economy in a single day.
   Show the answer

   A. Weak banks, unequal wealth and overproduction created weaknesses that the crash exposed. The crash was a trigger, but the deeper weaknesses in banks, wealth and production caused most of the damage.

2. 2Which agency insures bank deposits?

   1. TVA
   2. SEC
   3. CCC
   4. FDIC
   Show the answer

   D. FDIC The FDIC, created in 1933, insures bank deposits. The SEC regulates the stock market, which is a different job.

3. 3Why did the AAA pay farmers to grow less?

   1. To move farmers from the Great Plains to cities.
   2. To reduce the food supply so that prices would rise.
   3. To send surplus crops abroad as relief.
   4. To pay for Hoovervilles in the cities.
   Show the answer

   B. To reduce the food supply so that prices would rise. The AAA paid farmers to grow less so prices would rise, because overproduction had pushed farm prices down.

4. 4Which program hired young men for conservation work in 1933?

   1. Wagner Act
   2. NIRA
   3. WPA
   4. CCC
   Show the answer

   D. CCC The Civilian Conservation Corps (CCC), created in 1933, hired young men for planting trees and building parks. The WPA was a larger jobs program created in 1935.

5. 5Why did Congress reject FDR's court-packing plan?

   1. The Court had already ruled every New Deal law unconstitutional.
   2. It would have ended the Wagner Act.
   3. It threatened the separation of powers.
   4. It would have let the president veto Court rulings.
   Show the answer

   C. It threatened the separation of powers. Congress saw the plan as a threat to the separation of powers. The Court soon began upholding New Deal laws, which reduced the pressure for the plan.

6. 6Which group did the Social Security Act initially leave out?

   1. Farm and domestic workers
   2. Wall Street investors
   3. Dust Bowl migrants who moved west
   4. Retired bankers
   Show the answer

   A. Farm and domestic workers The Social Security Act first excluded farm and domestic workers, which left out many African Americans and women. This is a key detail for essays on the New Deal's limits.

Test traps

What teachers like to test on this, and the mistakes students make.

• Treating the 1929 crash as the sole cause of the Depression instead of one trigger that exposed deeper weaknesses like overproduction, unequal wealth and weak banks.
• Confusing the FDIC, which insures bank deposits, with the SEC, which regulates the stock market.
• Mixing up the CCC (1933, young men doing conservation work) with the WPA (1935, a much larger jobs program for many kinds of workers).
• Saying Hoover did nothing for the economy. He used the Reconstruction Finance Corporation and public works, but he opposed direct federal relief to individuals.
• Forgetting that the Supreme Court struck down the NIRA and AAA, and that the court-packing plan of 1937 was rejected by Congress.
• Forgetting that Social Security first excluded farm and domestic workers, which left out many African Americans and women.

Summary

• The Great Depression had deep causes in the 1920s, including overproduction, buying on margin, unequal wealth and weak banks.
• The 1929 stock market crash wiped out savings and confidence, and it exposed weaknesses that were already in the economy.
• Thousands of banks failed between 1930 and 1933, and by 1933 about one in four workers was unemployed.
• Hoover favored voluntary action by business and loans to banks and big businesses, and he opposed direct federal relief to individuals.
• Roosevelt's New Deal aimed to provide relief, restart recovery and reform the economy so another depression would be less likely.
• The First New Deal (1933 to 1934) focused on banks, the stock market, farms and industry, with programs like the FDIC and the SEC.
• The Second New Deal (1935 to 1938) focused on jobs, retirement and workers' rights, with programs like the WPA, Social Security and the Wagner Act.
• The Supreme Court struck down parts of the New Deal, which led to Roosevelt's 1937 court-packing plan that Congress rejected.
• The Depression ended mainly because World War II spending and the draft ended mass unemployment by the early 1940s.

Key terms

Buying on margin

Investing by paying a small part of a stock's price and borrowing the rest, which made the market risky when prices fell.

Overproduction

A situation where factories and farms made more goods than people could afford to buy, which pushed farm prices down.

Bank run

A rush of depositors trying to withdraw their savings at once because they fear the bank will fail.

Hoovervilles

Shantytowns during the Depression, named to mock President Hoover.

Dust Bowl

A 1930s disaster in the southern Great Plains where drought and over-plowing let winds strip away topsoil, forcing many families to move west.

Bonus Army

World War I veterans who camped in Washington, D.C., in 1932 demanding an early bonus; federal troops drove them out, which hurt Hoover's image.

Three Rs

The New Deal's goals of relief for the jobless, recovery of the economy and reform to prevent another depression.

FDIC

The Federal Deposit Insurance Corporation, created in 1933, which insures bank deposits.

SEC

The Securities and Exchange Commission, created in 1934, which regulates the stock market.

CCC

The Civilian Conservation Corps, created in 1933, which gave jobs to young men planting trees and building parks.

WPA

The Works Progress Administration, created in 1935, which provided millions of jobs building roads, schools and bridges.

Wagner Act

A 1935 law that protected workers' right to unionize and bargain collectively and created the National Labor Relations Board.

How to study it

The notes this pack came from

Questions