Great Depression Quiz

In the years leading up to 1929 the stock market got caught up in a speculative bubble, and investors wanted to maximize their potential to get in on the profits. In many cases they did not have the funds to actually pay for the large quantities of stocks they were trying to purchase; this led to the widespread practice of buying on margin — paying a portion of a stock’s purchase price with the promise of paying off the rest with future profits. Once the market began to slow, profits shrank, debts from margin purchases could not be repaid, and the entire system began to fall apart.

The Roaring Twenties were a great time for the richest Americans. Tax rates were low, investment opportunities were plentiful, and the stock market boomed. Since less than one percent of Americans owned any stock, the incredible returns in the stock market were narrowly focused. During this time the share of America's wealth controlled by the rich increased rapidly, to perhaps the highest level in American history.

Urban workers and the middle class also did well in the 1920s. Wages grew and amazing new products like automobiles, washing machines, and radios became much more affordable as manufacturers mastered the assembly line pioneered by Henry Ford.

However, nearly half of the population still lived in rural areas. Agricultural prices had boomed during the war, but afterwards there was glut of products and prices crashed. Life for rural Americans was very difficult and they struggled to get by.

As demand for American products declined, so did the need to continue mass producing supply. In response, employers were forced to downsize their once thriving industrial operations to simply try to remain in business. As a result, there were far fewer opportunities for employment.

Hoover pursued numerous policies in an effort to get the country out of the depression, though he did try keep the government from getting directly involved in commercial activities. Some of his policies were definitely counterproductive, such as the Smoot-Hawley Tariff, which crippled international trade.

There is wide agreement that Hoover's policies were ineffective, but strong disagreement about what course of action he should have taken. Some argue that his policies only deepened the recession and that the economy would have been better off without these actions. Others argue that Hoover did not do nearly enough to combat the recession, and that his actions were far too limited to halt the downward spiral of the economy.

The Bonus Army marched on Washington to demand the bonuses they were promised for participating in World War I. The $1,000 bonus was not supposed to be issued until 1945, but so many of the veterans were negatively impacted by the Great Depression that they organized to try and get the payments sooner. When 2,000 of the 20,000 members remained in Washington D.C., still demanding payment, President Hoover called in the army to clear them out by force.

FDR put together a group of economists, lawyers, and social workers and tasked them with generating progressive solutions to the economic and institutional issues plaguing America. This “Brain Trust” would also help FDR with his presidential campaign in 1932.

Hoover’s inability to help the nation out of the Great Depression ruined his chances at reelection. Roosevelt won the electoral votes from 44 of the 50 states. His landslide victory signaled the public’s desire for serious change.

FDR was able to rebuild the American public’s faith in the banking system through a blend of sound economic policy and direct, honest messaging. Following the weak attempts at reform made by Hoover, the American public was willing to listen to and embrace FDR’s approach to resolving the bank crisis.

The series of sweeping changes that made up the New Deal would have profound impacts on the American economy, social welfare, and natural resource management.

Throughout the New Deal era, FDR capitalized on an American workforce that needed employment. Many of the New Deal programs would put Americans back to work improving things like roads, the electrical grid, schools, and ports that would, in turn, have long-lasting benefits for the nation.

By subsidizing American farmers and limiting the supply of agricultural products in the market, the Agricultural Adjustment Act helped raise prices and profits across America’s agricultural economy.

The Great Depression opened the door to a lot of changes in the American workforce. Both women and African Americans saw increased opportunities thanks to New Deal programs. In contrast, young people increasingly chose to continue their education when they could not find work.

The Dust Bowl phenomenon in the southern Great Plains was caused by the combination of over-farming the land and a period of drought in the early 1930s. The nutrient-rich soil was eroded and blown away by intense prairie winds resulting in massive dust storms and an increasingly barren landscape. Large numbers of farmers were left with no choice but to abandon their farms and head towards the west coast in search of tenant farming and migrant work opportunities.

Many of America’s most successful business leaders were concerned that the New Deal was a blatant threat to American capitalism and free enterprise. They argued that government interference in the economy was unconstitutional.

The potential third-party candidate and long-time FDR supporter was adamant that redistributing American wealth was the key to American recovery. Long was assassinated in 1935, but his plan to promote financial equality remained widely popular with large numbers of struggling Americans.

The Revenue Act aimed to help balance out the growing income inequality in America. The funds generated by the act were used to help pay for Roosevelt’s ambitious Second New Deal. There was a lot of popular support for the law, however the wealthiest Americans were predictably unhappy that their fortunes were being targeted.

The WPA was a cornerstone of FDR’s Second New Deal. The WPA not only put American laborers back to work, but also employed hundreds of artists who were commissioned to help craft and document culturally meaningful creations.

One of the most long-standing benefits of FDR’s New Deal reforms was the Social Security Act. To this day, working Americans pay a portion of their earned income to support the Social Security benefits of retired Americans.

The Great Depression initially led to a sharp drop in union membership, but when economy began to recover in 1933, so did union membership. FDR strongly favored labor unions and they became a major component of his New Deal coalition, an alliance of interest groups that supported the New Deal and voted for Democratic presidential candidates.

The National Labor Relations Act of 1935 (also known as the Wagner Act) was passed to guarantee the rights of private sector employees to organize into trade unions and engage in collective bargaining. The Act also established the National Labor Relations Board which was empowered to prevent unfair labor practices.

At the beginning of his second term, FDR hoped to enact a radical change to the Constitution and add six new judges to the Supreme Court. Roosevelt was hoping the move would help keep his progressive New Deal policies intact. There was a staunch opposition to the move both in Congress and among the American people, and Roosevelt’s plan never came to fruition.