Evaluate the causes of the Great Depression and the impact of the New Deal, 1929-1941

What this dot point is asking

This depth study focuses on the economic crisis of the 1930s and the political response to it, a distinct period within the Section A study of the United States.

The causes of the Depression went deeper than the stock market. The Wall Street Crash, peaking on Black Thursday (24 October) and Black Tuesday (29 October) 1929, destroyed confidence and wiped out fortunes bought "on the margin" with borrowed money. But the crash exposed rather than created the underlying problems: overproduction in industry and agriculture, an unequal distribution of wealth that limited spending power, a fragile banking system, and heavy reliance on consumer credit. As demand collapsed, factories closed, banks failed and the downturn spiralled.

President Herbert Hoover's response seemed inadequate. Committed to limited government, voluntary action and balanced budgets, he believed recovery would come naturally and resisted large-scale federal relief, though he did eventually create bodies such as the Reconstruction Finance Corporation. The harsh dispersal of the Bonus Army of unemployed veterans by federal troops in 1932 damaged his reputation further, and he was blamed for the disaster.

Franklin D. Roosevelt won the 1932 election promising a "New Deal" and confidence, declaring that Americans had nothing to fear but fear itself. After taking office in March 1933 he launched the Hundred Days of emergency legislation. The First New Deal (1933 to 1934) included the Emergency Banking Act, the Civilian Conservation Corps (CCC), the Agricultural Adjustment Act (AAA), the National Recovery Administration (NRA) and the Tennessee Valley Authority (TVA). The Second New Deal from 1935 added the Works Progress Administration (WPA), the Wagner Act protecting unions, and the Social Security Act creating pensions and unemployment insurance, expanding the federal government's role permanently.

Roosevelt faced opposition from several directions. The political right and business attacked the New Deal as expensive and a threat to free enterprise. The Supreme Court struck down the NRA and AAA as unconstitutional in 1935 to 1936, prompting Roosevelt's failed "court-packing" plan of 1937. Critics on the left and populists, such as Senator Huey Long with his "Share Our Wealth" plan and the radio priest Father Coughlin, argued the New Deal did too little to redistribute wealth. Despite this, Roosevelt won re-election repeatedly and built a powerful Democratic coalition that included organised labour and, for the first time in large numbers, northern African American voters.

Historians debate the New Deal's character and success. Some see it as a pragmatic rescue of capitalism that preserved democracy at a time when other nations turned to dictatorship. Others, the "New Left", criticise how little it changed deep inequalities of race and class, noting that black Americans and many of the poorest were often excluded from its benefits. Conservative critics argue it prolonged the Depression by interfering with markets. For TASC source work, weigh the New Deal's genuine relief and reform against its limits, and assess how far it, rather than the war, brought recovery.

The question of what ended the Depression is a sharp historiographical debate useful for essays. Keynesian-influenced historians argue the New Deal's spending was simply too cautious to close the gap, and that it was the vast deficit spending of the Second World War, not a flaw in the New Deal idea, that finally restored full employment. Conservative economists counter that New Deal regulation and uncertainty discouraged private investment and so prolonged the slump. The 1937 to 1938 recession, which followed Roosevelt's attempt to balance the budget, is the key evidence both sides cite. A strong TASC answer presents this dispute and uses it to reach a judgement about the New Deal's economic success.