Great Depression, New Deal, and World War II
Analyze economic collapse, New Deal expansion, World War II mobilization, home front change, internment, and global consequences.
A lesson of AP United States History, in Periods 6-7: 1865-1945, about 10 minutes.
The Great Depression, New Deal, and World War II
By the end of this lesson, you will be able to explain the causes of the Great Depression, analyze the New Deal's programs and their limitations, and evaluate how WWII transformed American society and the international order.
The Great Depression (1929–1941)
Causes
The stock market crash (October 1929, "Black Tuesday") triggered the Great Depression — but it was not the sole cause.
Underlying structural weaknesses:
- Agricultural depression: farm prices had been depressed since 1921; farmers couldn't absorb more losses
- Overproduction and underconsumption: factories produced more than Americans could afford to buy; credit masked the problem temporarily
- Wealth inequality: income concentrated at the top; mass purchasing power insufficient
- Unstable banking system: no deposit insurance; bank runs triggered chain reactions
- International imbalances: war debts and reparations destabilized European economies; U.S. lenders exposed
The crash and its aftermath:
- Stock market fell 89% from 1929 to 1933 peak to trough
- 9,000 banks failed (1930–1933); savings wiped out
- Unemployment reached 25% nationally; some cities saw 50%+
- GDP fell 30%; industrial production halved
- Hawley-Smoot Tariff (1930): raised tariffs on imports → trading partners retaliated → international trade collapsed
Hoover's response: Believed in "voluntary" cooperation and that government direct relief would destroy self-reliance; created RFC (Reconstruction Finance Corporation) to lend to banks and industries but refused direct aid to individuals.
Bonus Army (1932): WWI veterans marched on Washington demanding early bonus payment; Hoover ordered Army to disperse them; MacArthur burned their camp with tanks; public outrage.
The New Deal (1933–1939)
Franklin D. Roosevelt won a landslide in 1932; took office March 4, 1933. "The only thing we have to fear is fear itself."
The Three R's: Relief, Recovery, Reform
First Hundred Days (1933): unprecedented legislative action: