Depth Study: The USA, 1919–41

What you'll learn

This depth study examines the dramatic transformation of the United States between 1919 and 1941, from post-World War One prosperity through economic collapse to Roosevelt's New Deal recovery programmes. You'll explore the causes and consequences of the 1929 Wall Street Crash, assess Republican economic policies of the 1920s, evaluate Roosevelt's New Deal, and examine how different social groups experienced this turbulent period. This topic requires detailed knowledge of policies, key individuals, and the ability to analyse cause, consequence and significance.

Key terms and definitions

Laissez-faire — Economic policy where the government avoids intervention in business and industry, allowing free market forces to operate with minimal regulation

Protectionism — Economic policy using tariffs (taxes on imports) to protect domestic industries from foreign competition, exemplified by the 1922 Fordney-McCumber Tariff

Rugged individualism — President Hoover's belief that Americans should succeed through their own efforts without government assistance, rejecting federal welfare programmes

Alphabet Agencies — Popular nickname for New Deal organizations known by their initials (such as CCC, TVA, AAA), created to tackle unemployment and economic recovery

Prohibition — The constitutional ban on manufacturing, selling and transporting alcohol in the USA from 1920-1933 under the 18th Amendment

Stock speculation — Buying shares expecting prices to rise, often using borrowed money ('buying on the margin'), which contributed to the 1929 stock market bubble

Dust Bowl — Severe drought and soil erosion affecting the Great Plains states (especially Oklahoma, Kansas, Texas) during the 1930s, forcing mass migration westward

Supreme Court — The highest federal court in the USA, which declared several early New Deal laws unconstitutional, blocking Roosevelt's reforms until 1937

Core concepts

The boom years: Republican economic policies 1920s

The Republican presidencies of Harding, Coolidge and Hoover (1921-1933) pursued pro-business policies that initially created spectacular economic growth.

Key Republican policies:

• Low taxation — Treasury Secretary Andrew Mellon reduced income tax from 73% to 24% for the wealthy, believing this encouraged investment and spending
• Tariffs — The 1922 Fordney-McCumber Tariff raised import duties to protect American manufacturers, though this damaged international trade
• Laissez-faire regulation — Minimal government interference allowed businesses to maximize profits and expand
• Support for trusts — Unlike Progressive Era reforms, Republicans tolerated monopolies and business consolidation

Factors driving the boom:

• New industries (automobiles, electricity, radio, cinema) created jobs and consumer demand
• Mass production techniques, pioneered by Henry Ford's assembly lines, reduced costs and increased output
• Hire purchase (credit) allowed consumers to buy expensive goods by instalments, stimulating demand
• Advertising created desire for new consumer products
• Confident investors poured money into the stock market, driving share prices upward

Limitations of prosperity:

Not all Americans benefited equally. Agriculture struggled throughout the 1920s with falling prices caused by overproduction and declining European demand after WWI. Farmers faced debt and foreclosures. Traditional industries like coal and textiles declined as oil and synthetic fibres replaced them. African Americans, recent immigrants and workers in old industries remained poor. Wealth inequality increased dramatically—by 1929, 5% of Americans earned one-third of all income.

The Wall Street Crash and Great Depression

The stock market collapse of October 1929 triggered the worst economic depression in American history.

Causes of the Crash:

• Overproduction — Industries produced more goods than consumers could purchase, leading to unsold stock
• Speculation bubble — Share prices bore no relation to company values; investors bought shares purely expecting to sell at higher prices
• Buying on the margin — Investors borrowed up to 90% of share costs; when prices fell, they couldn't repay loans
• Unequal wealth distribution — Most Americans lacked purchasing power to sustain demand
• Weak banking system — Many small banks had invested depositors' savings in stocks
• International problems — European countries couldn't afford American goods due to war debts and US tariffs

October 1929 timeline:

• 24 October (Black Thursday) — 13 million shares sold as panic began
• 29 October (Black Tuesday) — 16 million shares sold; market collapsed
• By mid-November, stocks lost 40% of their value

Consequences of the Depression:

• Unemployment soared from 3% (1929) to 25% (1933)—approximately 13 million Americans jobless
• Bank failures — Over 5,000 banks collapsed by 1933, destroying depositors' savings
• Homelessness — Thousands lost homes; shanty towns called "Hoovervilles" appeared in major cities
• Farm crisis — Agricultural prices fell 60%; farm foreclosures increased dramatically
• International impact — US banks recalled overseas loans, spreading depression to Europe; world trade declined 65%

Hoover's response to the Depression

President Herbert Hoover (1929-1933) believed in rugged individualism and opposed direct federal relief, arguing that government handouts undermined American character.

Hoover's limited measures:

• Encouraged voluntary cooperation between businesses to maintain wages and employment (largely ignored)
• Created the Reconstruction Finance Corporation (RFC) in 1932, lending $2 billion to banks and businesses (criticized as helping the rich, not ordinary people)
• Approved some public works projects, including Boulder Dam (later Hoover Dam)
• Raised tariffs with the 1930 Hawley-Smoot Tariff, worsening international trade

Why Hoover's approach failed:

• He refused to provide direct federal unemployment relief, insisting this was states' and charities' responsibility
• State governments and charities lacked resources to cope with mass unemployment
• Hoover appeared uncaring, damaging his reputation
• The Bonus Army incident (1932) destroyed remaining public support—WWI veterans marching for early pension payments were violently dispersed by federal troops under General Douglas MacArthur

Roosevelt and the First New Deal (1933-1935)

Franklin D. Roosevelt won the 1932 presidential election promising a "New Deal for the American people." His approach contrasted sharply with Hoover's—Roosevelt believed federal government must intervene actively.

The Hundred Days (March-June 1933):

Roosevelt's administration passed 15 major laws in its first 100 days, establishing the pattern for the New Deal.

Banking and finance:

• Emergency Banking Act (March 1933) — Closed all banks temporarily; only sound banks allowed to reopen, restoring public confidence
• Glass-Steagall Banking Act — Created Federal Deposit Insurance Corporation (FDIC), guaranteeing deposits up to $5,000
• Securities Act — Regulated stock market to prevent speculation abuses

Unemployment relief (Alphabet Agencies):

• Civilian Conservation Corps (CCC) — Provided jobs for 2.5 million young men in environmental conservation projects (forestry, flood control)
• Federal Emergency Relief Administration (FERA) — Provided $500 million in direct relief payments to states for the unemployed
• Civil Works Administration (CWA) — Created 4 million temporary jobs in public works during winter 1933-34
• Public Works Administration (PWA) — Funded major infrastructure projects (schools, hospitals, dams)

Agricultural recovery:

• Agricultural Adjustment Act (AAA) — Paid farmers to reduce production, raising prices; funded by taxes on food processors
• Farm Credit Act — Refinanced farm mortgages to prevent foreclosures

Industrial recovery:

• National Industrial Recovery Act (NIRA) — Created National Recovery Administration (NRA) setting industry codes for wages, prices and working conditions; guaranteed workers' right to join unions
• Tennessee Valley Authority (TVA) — Ambitious regional development programme building dams for electricity, flood control and jobs in seven southern states

The Second New Deal (1935-1938)

After criticism that the First New Deal helped business more than workers, and facing Supreme Court opposition, Roosevelt launched more radical reforms in 1935.

Key Second New Deal measures:

• Works Progress Administration (WPA, 1935) — Largest New Deal agency, employing 8.5 million Americans in construction, arts and professional projects
• Social Security Act (1935) — Revolutionary welfare legislation providing:
  • Old-age pensions funded by worker and employer contributions
  • Unemployment insurance
  • Support for disabled and dependent children
• Wagner Act (National Labor Relations Act, 1935) — Strengthened trade union rights; established National Labor Relations Board to prevent unfair employer practices; union membership doubled to 9 million by 1940
• Fair Labor Standards Act (1938) — Established minimum wage (25 cents/hour), maximum working week (44 hours) and banned child labour in interstate commerce

Opposition to the New Deal:

From the Right:

• Republicans and business leaders opposed increased taxation, government intervention and support for unions
• Supreme Court declared NIRA and AAA unconstitutional (1935-1936), arguing they exceeded federal powers
• Roosevelt's 1937 "court-packing" plan (to add sympathetic justices) was rejected but intimidated the Court into accepting later New Deal laws

From the Left:

• Critics argued the New Deal didn't go far enough; Senator Huey Long proposed "Share Our Wealth" scheme confiscating fortunes over $5 million
• Communist Party attracted some supporters, arguing capitalism had failed
• Unemployment remained high—9.5 million in 1939

Social impact: Different American experiences 1919-41

African Americans:

• 1920s: Continued to face discrimination, segregation (especially in the South) and violence; the "Great Migration" saw 1.5 million move from rural South to northern cities seeking jobs
• Depression: "Last hired, first fired" meant Black unemployment reached 50% in cities; discriminated against in relief programmes
• New Deal: Roosevelt avoided challenging segregation to maintain Southern Democrat support; however, some New Deal agencies (like PWA) had non-discrimination policies. Eleanor Roosevelt championed civil rights, appointing Mary McLeod Bethune as advisor. Some Black Americans gained federal employment in Roosevelt's "Black Cabinet"

Women:

• 1920s: Won the vote (19th Amendment, 1920); increasing independence symbolized by "flappers" challenging Victorian morality; more women in work (especially offices), though usually low-paid roles
• Depression: Faced discrimination in employment; many employers sacked married women, arguing jobs should go to male breadwinners
• New Deal: Few programmes specifically targeted women; most CCC and PWA jobs reserved for men; however, Frances Perkins became first female Cabinet member as Secretary of Labor

Native Americans:

• Indian Reorganization Act (1934) — Ended forced assimilation policies; tribes gained self-government rights and land restoration; John Collier as Indian Commissioner promoted Native culture

Immigrants:

• 1920s: Immigration Quota Acts (1921, 1924) drastically reduced numbers, discriminating against Southern and Eastern Europeans
• Depression: Mexican Americans faced deportation campaigns; approximately 500,000 (including US citizens) sent to Mexico to reduce unemployment

Prohibition and organised crime

The 18th Amendment (1920) banned alcohol manufacture, sale and transportation, enforced by the Volstead Act.

Reasons for Prohibition:

• Temperance movements argued alcohol caused poverty, crime and family breakdown
• Industrial employers wanted sober, efficient workers
• Religious groups (especially Protestant evangelicals) considered drinking immoral
• Anti-German sentiment during WWI targeted German-American brewers

Why Prohibition failed:

• Impossible to enforce—only 1,500 Prohibition agents to police entire nation
• Widespread public defiance through illegal speakeasies (estimated 32,000 in New York alone)
• Bootlegging (illegal alcohol production and distribution) became massive criminal industry
• Police and officials were frequently bribed to ignore violations
• Organised crime syndicates, led by gangsters like Al Capone (Chicago), earned millions from illegal alcohol, using violence to control territory
• By 1933, public opinion recognised Prohibition as unworkable

The 21st Amendment (1933) repealed Prohibition—the only constitutional amendment ever reversed.

Worked examples

Example 1: Describe two features of the economic boom in the USA in the 1920s. (4 marks)

This question requires two separate features with supporting detail for each.

Model answer:

One feature of the economic boom was the growth of new consumer industries. The automobile industry, led by Henry Ford's mass production techniques, grew dramatically—car ownership increased from 8 million (1920) to 23 million (1929), creating jobs in manufacturing, steel, rubber and road construction.

A second feature was the use of hire purchase (credit) to buy goods. This allowed ordinary Americans to purchase expensive items like cars and radios by paying in instalments, which stimulated consumer demand and drove industrial expansion throughout the decade.

Mark scheme guidance: Award 1 mark for each identified feature and 1 additional mark for supporting detail (2+2 structure).

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Example 2: Explain why President Hoover's response to the Great Depression was unsuccessful. (8 marks)

This question requires multiple explained reasons with precise supporting evidence.

Model answer:

Hoover's response failed primarily because he refused to provide direct federal relief to the unemployed. He believed in "rugged individualism"—the idea that government handouts undermined American self-reliance—and insisted that state governments and charities should help the unemployed. However, by 1932, with 13 million unemployed, state governments had exhausted their budgets and charities couldn't cope with the scale of the crisis. This meant millions received no assistance, causing widespread hunger and homelessness.

Secondly, Hoover's measures were too limited and helped the wrong people. His Reconstruction Finance Corporation lent $2 billion to banks and businesses rather than directly assisting ordinary Americans. This appeared to favour the wealthy while common people suffered, earning Hoover a reputation for being uncaring. Shanty towns were mockingly called "Hoovervilles," reflecting public anger.

Finally, the Bonus Army incident of 1932 destroyed Hoover's remaining public support. When WWI veterans marched to Washington requesting early pension payments, Hoover ordered troops under General MacArthur to disperse them forcibly. The violent eviction, broadcast nationally, confirmed public perception that Hoover was heartless and out of touch with ordinary Americans' suffering.

Mark scheme guidance: Award marks for explained reasons (not simple descriptions). Top-level answers (7-8 marks) include 3+ explained reasons with precise supporting evidence showing clear causal links between Hoover's policies and their failure.

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Example 3: "The main reason for the Wall Street Crash of 1929 was speculation." How far do you agree with this statement? (16 marks + 4 SPaG)

This is a high-tariff question requiring balanced analysis of multiple causes with a substantiated judgement.

Model answer structure:

Introduction: State your line of argument—e.g., "While speculation was important, the Crash resulted from multiple interconnected economic weaknesses, particularly overproduction and unequal wealth distribution."

Paragraph 1: Agree—explain speculation's role. Stock speculation created an unsustainable bubble; investors bought shares expecting prices to rise regardless of company value. Buying on the margin meant people borrowed up to 90% of share costs. When prices fell in October 1929, investors couldn't repay loans, forcing mass selling that collapsed the market. By mid-November, stocks had lost 40% of their value.

Paragraph 2: Disagree—overproduction was equally important. Industries produced more goods than consumers could purchase. Car production, for example, exceeded demand by 1929, creating unsold inventory. When companies couldn't sell products, they cut production and laid off workers, reducing consumer purchasing power further in a downward spiral that made economic collapse inevitable.

Paragraph 3: Disagree—wealth inequality undermined the economy. By 1929, 5% of Americans earned one-third of all income. This meant most Americans lacked purchasing power to sustain consumer demand. The boom depended on credit and stock market wealth rather than broadly distributed prosperity, creating fundamentally unstable foundations.

Paragraph 4: Other factors—weak banking system. Many small banks had invested depositors' savings in stocks. When the market crashed, banks failed (5,000 by 1933), destroying savings and further reducing money available for spending, deepening the Depression.

Conclusion: Provide a substantiated judgement weighing the factors. E.g., "Speculation triggered the immediate crisis in October 1929, but the Depression's severity resulted from underlying structural problems—overproduction, inequality and banking weakness—that made economic collapse inevitable. Speculation was the spark, but these factors provided the fuel."

Mark scheme guidance: Top level (13-16 marks) requires sustained analysis of multiple factors, evaluating their relative significance, with a clearly substantiated judgement supported throughout. Award SPaG marks (4) for accurate spelling, punctuation and grammar using historical terminology precisely.

Common mistakes and how to avoid them

• Confusing the Crash with the Depression — The Wall Street Crash (October 1929) was a single event; the Great Depression (1929-1939) was the prolonged economic crisis that followed. Be precise about timeline and causation.

• Vague references to "the New Deal" — Don't treat the New Deal as one programme. Specify which agency or law you're discussing (e.g., "The CCC provided conservation jobs" not "The New Deal helped unemployment"). Distinguish First New Deal (1933-35) from Second New Deal (1935-38).

• Exaggerating New Deal success — The New Deal reduced unemployment but didn't end the Depression—9.5 million remained jobless in 1939. Full employment only came with WWII rearmament. Acknowledge limitations and opposition (Supreme Court, business leaders, limited help for Black Americans and women).

• Ignoring social groups — Questions about "American society" require discussion of different experiences. Don't write only about white men—include African Americans, women, farmers, immigrants where relevant.

• Listing facts without explanation — IGCSE questions reward explanation and analysis, not narrative. Always link evidence to the question. For "Explain why..." questions, ensure each paragraph shows clear causation.

• Weak conclusions on evaluation questions — For 16-mark "How far do you agree?" questions, your conclusion must provide a substantiated judgement weighing different factors, not simply repeat earlier points or sit on the fence.

Exam technique for "Depth Study: The USA, 1919–41"

• Command words: "Describe" (4 marks) = identify features with supporting detail; "Explain why" (8 marks) = give multiple explained reasons with evidence; "How far do you agree?" (16 marks) = balanced analysis evaluating different interpretations with substantiated judgement. Tailor your approach to the command word.

• Use the mark scheme formula: 4-mark questions = 2 points × 2 marks each (point + development); 8-mark questions = 3 explained reasons with supporting evidence; 16-mark questions = sustained analysis of multiple perspectives (typically 4-5 paragraphs: introduction, 3-4 analytical paragraphs, conclusion with judgement).

• Deploy precise evidence: Use specific laws (Glass-Steagall Act, Wagner Act), statistics (unemployment 25% by 1933), individuals (Hoover, Roosevelt, Al Capone), dates (Black Tuesday 29 October 1929) and agencies (CCC, TVA, WPA) to demonstrate detailed knowledge. Vague answers score poorly.

• Manage time effectively: Allocate time proportional to marks—roughly 5 minutes for 4-mark questions, 10 minutes for 8-mark questions, 20-25 minutes for 16-mark questions. This leaves time for planning and checking your 16-mark essay, which also carries 4 SPaG marks.

Quick revision summary

The USA experienced dramatic change 1919-41. Republican laissez-faire policies and new industries created 1920s prosperity, but benefits were unevenly distributed. The 1929 Wall Street Crash, caused by speculation, overproduction and inequality, triggered the Great Depression with 25% unemployment. Hoover's limited response failed because he rejected direct federal relief. Roosevelt's New Deal (1933-38) created Alphabet Agencies (CCC, WPA, TVA), banking reforms, Social Security and labour rights, reducing but not ending unemployment. Different groups—African Americans, women, farmers—experienced the era differently, often facing continued discrimination despite New Deal reforms.