You are viewing a free preview of this lesson.
Subscribe to unlock all 10 lessons in this course and every other course on LearningBro.
If the 1920s advertised the American Dream as effortless abundance, the Great Depression (1929-41) shattered it, and the New Deal rebuilt it on new terms — terms that placed the federal government, for the first time, at the centre of the promise of economic security. This is the pivotal chapter in the course's second great thread: the changing role of government. Before 1933 the Dream was understood as the reward of private enterprise, with government standing back; after 1933 a substantial part of the population came to expect that Washington bore some responsibility for their welfare, their savings and their old age. Whether the New Deal constituted a genuine revolution in American government, a pragmatic rescue of capitalism, or a missed opportunity for more radical change is the defining analytical problem of the topic — and, running through it, the question of who was included in the reconstructed Dream and who, once again, was left out.
For this Edexcel breadth study the Depression and New Deal are the hinge on which the whole American Dream story turns. They mark the moment when the promise of prosperity collapsed for millions and was redefined to include a role for the state, establishing the welfare framework and the Democratic "New Deal coalition" that shape politics down to the 1970s. The central tasks are evaluative: weighing the New Deal's record on relief, recovery and reform; assessing its deeply ambiguous treatment of African Americans; and judging the wider significance of the transformation it wrought in the reach of government. Throughout, hold the breadth question in view — how far did the New Deal restore, and redraw, the American Dream?
By the end of this lesson you will be able to:
This lesson belongs to Edexcel 9HI0 Paper 1, Option 1F (Route F): "In search of the American Dream: the USA, c1917-96" — a breadth study assessed by extended analytical essays and by the evaluation of historians' interpretations. Within our own teaching sequence it develops the role of government thread that runs the length of the course, building directly on the laissez-faire 1920s (Lesson 1) and feeding forward to the wartime state (Lesson 3) and the Great Society (Lesson 6).
Because Paper 1 is a breadth paper, examiners reward command of change over time and judgements that range across the period. Keep asking how far the New Deal permanently altered the relationship between the citizen and the federal government. (For precise assessment weightings and question wording, always consult the official Edexcel specification and sample assessment materials rather than any paraphrase.)
The Depression's impact was staggering by any measure, and it fell hardest on precisely the ordinary Americans to whom the 1920s had promised abundance.
| Indicator | 1929 | 1933 (worst point) |
|---|---|---|
| Unemployment | about 3.2 per cent | about 24.9 per cent (12.8 million people) |
| GDP | $104 billion | $56 billion (a 46 per cent fall) |
| Industrial production | index 100 | index 54 |
| Bank failures (cumulative) | — | over 9,000 banks failed 1930-33 |
| Farm income | $6.2 billion | $2 billion |
| Stock market (Dow Jones) | 381 (Sept 1929) | 41 (July 1932) |
The human suffering was immense. Hoovervilles — shanty towns of makeshift shelters — sprang up in cities across the country; breadlines and soup kitchens became ubiquitous; families were evicted from their homes, and the birth rate fell as couples postponed marriage. The Dust Bowl (1934-36) compounded the agricultural catastrophe: years of over-ploughing the southern Great Plains, followed by severe drought, turned the topsoil to dust, and immense "black blizzards" buried farms. Roughly 2.5 million people were driven from the Plains, many of them — the "Okies" later immortalised in John Steinbeck's The Grapes of Wrath (1939) — migrating west to California in search of work they rarely found. For a study of the American Dream the Depression is the great inversion: the promise of self-reliant prosperity became, for a quarter of the workforce, the reality of joblessness, hunger and dispossession that no amount of individual effort could overcome.
President Herbert Hoover (1929-33) was neither the callous do-nothing of popular mythology nor an effective crisis manager. His response was constrained by his philosophy of "rugged individualism" — the belief that voluntary cooperation, not government intervention, was the American way, and that direct federal relief would sap the self-reliance on which the Dream depended.
| Action | Detail | Assessment |
|---|---|---|
| Voluntary cooperation | Asked businesses to maintain wages and employment | Largely ignored as the crisis deepened |
| Reconstruction Finance Corporation (1932) | Loans to banks, railroads and insurance companies | A "trickle-down" approach that helped institutions, not individuals directly |
| Smoot-Hawley Tariff (1930) | Raised tariffs to the highest levels in American history | Provoked retaliation; worsened the collapse of world trade |
| Bonus Army (1932) | WWI veterans marched on Washington demanding early payment of bonuses; Hoover ordered the army to disperse them with tanks and tear gas | Destroyed his remaining public support |
The historian David Kennedy argues that Hoover's response was more substantial than his critics acknowledge but was fundamentally inadequate, because Hoover could not bring himself to accept the scale of government intervention the crisis demanded. His significance for the course is as the last champion of the old, laissez-faire understanding of the American Dream — the conviction that opportunity was a private matter and government's role minimal. His failure discredited that view and cleared the way for its replacement.
The 1932 election was a landslide: Franklin Delano Roosevelt won 472 electoral votes to Hoover's 59, carrying all but six states on the promise of a "New Deal for the American people" — a phrase deliberately vague as to specifics. Roosevelt brought three crucial qualities: pragmatism (a readiness, as he put it, to try one method and, if it failed, try another); communication (his radio "fireside chats" reassured millions); and political acumen (he built a broad coalition of labour, farmers, urban ethnic voters, African Americans in the North and Southern whites — the "New Deal coalition" that would dominate politics for a generation). His inaugural assertion that the only thing to fear was fear itself set the tone for an administration that treated the restoration of national morale as a task of government. In redefining what citizens could expect from Washington, Roosevelt was redefining the American Dream itself: security was now part of the promise.
Roosevelt's first hundred days (March-June 1933) produced an unprecedented burst of legislation, conventionally grouped as the "three Rs" — relief, recovery and reform.
| Agency/Act | Purpose | Outcome |
|---|---|---|
| Emergency Banking Act | Closed all banks for inspection; only sound banks reopened | Restored public confidence; bank runs ended |
| FDIC (Federal Deposit Insurance Corporation) | Insured bank deposits | Prevented future bank runs; still exists today |
| CCC (Civilian Conservation Corps) | Employed young men (18-25) on conservation projects | Employed some 3 million men by 1942; hugely popular |
| FERA (Federal Emergency Relief Administration) | $500 million in direct grants to states for relief | Immediate but temporary relief; run by Harry Hopkins |
| AAA (Agricultural Adjustment Administration) | Paid farmers to reduce production, raising crop prices | Raised farm income; controversially destroyed crops while people went hungry; struck down in United States v. Butler (1936) |
| NRA (National Recovery Administration) | Set industry codes for wages, hours and fair competition; guaranteed labour's right to organise | Over-bureaucratic; codes often favoured big business; struck down in Schechter v. United States (1935) |
| TVA (Tennessee Valley Authority) | Dams, power plants, flood control and development in the Tennessee Valley | Transformed one of America's poorest regions; a model of regional planning; still operating |
The First New Deal was improvised and internally contradictory, but its direction was unmistakable: the federal government would now act directly to relieve suffering, restart the economy and reform the institutions whose failure had produced the crisis. This was the practical redrawing of the Dream to include a role for the state.
Facing criticism from both left and right, Roosevelt shifted leftward in 1935 with a wave of more ambitious legislation that shifted the emphasis from emergency relief toward lasting reform — and toward securing the position of labour and the poor within the American Dream.
| Legislation/Agency | Year | Significance |
|---|---|---|
| WPA (Works Progress Administration) | 1935 | Employed some 8.5 million people on public works — roads, bridges, schools, hospitals — and on arts projects; the largest New Deal employment programme |
| Social Security Act | 1935 | Established old-age pensions, unemployment insurance and aid to dependent children — the foundation of the American welfare state; but excluded agricultural and domestic workers (disproportionately Black) |
| Wagner Act (National Labor Relations Act) | 1935 | Guaranteed workers' right to organise and bargain collectively; union membership surged from 3.6 million (1935) to 10.5 million (1941) |
The Wagner Act helped ignite a dramatic upsurge in industrial unionism. The newly formed Congress of Industrial Organizations (CIO), led by John L. Lewis, organised whole industries rather than crafts, bringing in mass-production workers, immigrants and African Americans; the wave of sit-down strikes — most famously the victory over General Motors at Flint, Michigan (1936-37) — forced major corporations to recognise unions for the first time. This transformation, underwritten by federal law, was among the most far-reaching social consequences of the New Deal, and it cemented industrial workers within the Democratic coalition. The Social Security Act was the most enduring redefinition of the Dream: it established, for the first time in American history, the principle that the federal government bore responsibility for citizens against the hazards of old age and unemployment.
The expansion of federal power did not go unchecked. The Supreme Court's conservative majority struck down several key programmes as unconstitutional, including the NRA (Schechter, 1935) and the AAA (Butler, 1936). In February 1937 Roosevelt proposed the Judicial Reorganisation Bill — the "court-packing plan" — which would have let him appoint up to six additional justices. The plan provoked fierce opposition, even from his allies, as an attack on the independence of the judiciary, and it failed in Congress. Yet Justice Owen Roberts switched his voting pattern (the "switch in time that saved nine"), and the Court began upholding New Deal legislation. Roosevelt lost the battle but arguably won the war — a revealing episode in the constitutional limits of even a landslide president's power to remake the role of government.
Roosevelt faced significant opposition from multiple directions, each representing a different vision of how the Dream should be secured — or of whether government should be securing it at all.
| Critic | Position | Argument |
|---|---|---|
| Huey Long (Senator, Louisiana) | Left | "Share Our Wealth": guarantee every family an income and cap great fortunes; hugely popular until his assassination in 1935 |
| Father Charles Coughlin | Left/Right | Radio priest who turned against FDR; increasingly anti-Semitic and pro-fascist |
| Dr Francis Townsend | Left | Proposed a generous pension for all over-60s; influenced the Social Security Act |
| American Liberty League | Right | Business leaders who opposed the New Deal as socialist overreach on the old individualist Dream |
| Southern Democrats | Conservative | Supported the New Deal only where it preserved racial hierarchies; opposed measures that empowered Black workers |
The pressure from the left, especially Long's popularity, is often read as pushing Roosevelt toward the more radical Second New Deal — a reminder that the reconstruction of the Dream was contested at every step.
The New Deal's record on race was deeply ambiguous, and for a study of the American Dream this is a decisive test of inclusion. The reconstructed promise reached African Americans partially and unevenly, and in important respects deliberately excluded them.
Subscribe to continue reading
Get full access to this lesson and all 10 lessons in this course.