The Great Depression was a severe worldwide economic depression in the decade preceding World War II. It began in the United States but quickly spread throughout much of the world. The timing of the Great Depression varied across nations, but in most countries, it started in 1930 and lasted until the late 1930s or middle 1940s. It was the longest, deepest, and most widespread depression of the 20th century. The worst years of the Great Depression were 1932 and 1933.
The average family income dropped by 40% during the Great Depression. During this time, many people were out of work, hungry and homeless. In the city, people would stand in long lines at soup kitchens to get a bite to eat. In the country, farmers struggled in the Midwest where a great drought turned the soil into dust causing huge dust storms.
The board game ‘Monopoly’ which first became available in the 1930s, became popular because players could become rich during the playing of the game. The ‘Three Little Pigs’ was seen as a symbol of the Great Depression, with the wolf representing depression and the three little pigs representing average citizens who eventually succeeded by working together.
In 1929, unemployment was around 3%. In 1933, it was 25% with 1 out of every 4 people out of work.
The Great Depression began with the crash of the stock market in October 1929. Historians and economists give various causes for the Great Depression including drought, overproduction of goods, bank failures, stock speculation, and consumer debt.
The causes of the Great Depression are widely debated. There was no single cause, but several things when working together made it happen. A weak banking system, over-production of goods, overspending, and bursting credit bubble were just some of the reasons. The Wall Street Crash of 1929 was one of the main causes of the Great Depression. This stock market crash was the most devastating crash in the history of the United States. On “Black Tuesday”, October 29, 1929, the stock market lost $14 billion, making the loss for that week an astounding $30 billion.
More than $1 billion in bank deposits were lost due to bank closings.
The stock market lost almost 90% of its value between 1929 and 1933. It took 23 years for the stock market to hit the high it was at before the crash.
As the news of the stock market crash spread, customers rushed to their banks to withdraw their money, causing disastrous “bank runs”. People who had been very wealthy lost everything they had and some committed suicide. Many companies went out of business and huge numbers of people lost their jobs. At the peak of the depression, 1 out of every 4 people was without a job. Between 1930 and 1935, nearly 750,000 farms were lost through bankruptcy or sheriff sales.
Herbert Hoover was President of the United States when the Great Depression began. Many people blamed Hoover for the Great Depression. They even named the shantytowns where homeless people lived “Hoovervilles” after him. In 1933, Franklin D. Roosevelt was elected president. He promised the people of America a “New Deal”. President Roosevelt pushed 15 major laws through in his “First Hundred Days” of office.
The New Deal was a series of laws, programs, and government agencies enacted to help the country deal with the Great Depression. These laws placed regulations on the stock market, banks, and businesses. They helped put people to work and tried to help house and feed the poor. Many of these laws are still in place today like the Social Security Act. The New Deal created around 100 new government offices and 40 new agencies.
The Great Depression ended with the start of World War II. The wartime economy put many people back to work and filled factories to capacity.
The Great Depression left a lasting legacy in the United States. The New Deal laws significantly increased the role of the government in people’s everyday lives. Also, public works built up the infrastructure of the country with the construction of roads, schools, bridges, parks, and airports.
Farmers were usually safe from the severe effects of previous depressions because they could at least feed themselves. During the Great Depression, the Great Plains were also hit hard with a drought and dust storms, this was called the Dust Bowl.
Years of overgrazing combined with drought caused the grass to disappear. With topsoil exposed, high winds picked up the loose dirt and carried it over long distances. The dust storms destroyed crops, leaving farmers without food or something to sell.
Small farmers were hit especially hard. Even before the dust storms hit, the invention of tractor drastically cut the need for manpower on farms. These small farmers were usually already in debt, borrowing money for seed and paying it back when their crops came in. When the dust storms damaged the crops, not only could the small farmer not feed himself and his family, he could not pay back his debt. Banks would then foreclose on the mortgage and the farmer’s family would be homeless, unemployed and poor.
Millions of people migrated away from the Dust Bowl region in the Midwest. Around 200,000 migrants moved to California.
