The Great Depression (2024)

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1929 1930 1931 1932 1933 FAQs

1929

The 1920s were a period of optimism and prosperity – for some Americans. When Herbert Hoover became President in 1929, the stock market was climbing to unprecedented levels, and some investors were taking advantage of low interest rates to buy stocks on credit, pushing prices even higher. In October, 1929, the bubble burst, and in less than a week, the market dropped by almost half of its recent record highs. Billions of dollars were lost, and thousands of investors were ruined.

After the stock market crash, President Hoover sought to prevent panic from spreading throughout the economy. In November, he summoned business leaders to the White House and secured promises from them to maintain wages. According to Hoover’s economic theory, financial losses should affect profits, not employment, thus maintaining consumer spending and shortening the downturn. Hoover received commitments from private industry to spend $1.8 billion for new construction and repairs to be started in 1930, to stimulate employment.

The President ordered federal departments to speed up their construction projects and asked all governors to expand public works projects in their states. He asked Congress for a $160 million tax cut while doubling spending for public buildings, dams, highways, and harbors.

1930

Praise for the President’s intervention was widespread; the New York Times commented, “No one in his place could have done more. Very few of his predecessors could have done as much.” Together, government and business spent more in the first half of 1930 than in the entire previous year. Still consumers cut back their spending, which forced many businesses and manufacturers to reduce their output and lay off their workers.

In October 1930, with unemployment rising, Hoover created the President’s Emergency Committee for Employment (PECE) to coordinate state and local relief programs, and to develop methods for increasing employment in the private sector. But with no direct control of funding for relief or jobs, PECE had only limited success.

As the Depression worsened, Hoover requested that the Federal Reserve increase credit, and he persuaded Congress to transfer agricultural surpluses from the Federal Farm Board to the Red Cross for distribution to relief agencies. Hoover asked Congress for even more spending on public works, and he continued to encourage states and private businesses to generate new jobs.

1931

The Great Depression.

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The Great Depression.

Economic conditions improved in early 1931 until a series of bank collapses in Europe sent new shockwaves through the American economy, leading to additional lay-offs. In August 1931, PECE was reorganized as the President’s Organization on Unemployment Relief (POUR). POUR expanded on PECE's work but also implemented a national fund drive for unemployment relief. The national fund drive raised millions of dollars but proved to be woefully inadequate as unemployment soared to record levels.

Hoover was criticized for almost every program he proposed. His public works projects, designed to create jobs, were characterized as wasteful government spending. His efforts to promote local relief programs, rather than asking Congress to create nationwide relief programs, were viewed as callous disregard for the unemployed.

1932

On January 22, 1932, Hoover established the Reconstruction Finance Corporation (RFC) to make emergency loans to businesses in danger of default. At first the RFC lent money only to banks, railroads, and certain agricultural organizations, but the scope of its operations was later expanded, and it proved to be an effective tool for stabilizing business and industry. In July 1932, Hoover signed into law the Emergency Relief Construction Act, which allowed the RFC to lend $300 million to the states for relief programs and $1.5 billion for public works projects. Hoover also persuaded Congress to establish Federal Home Loan Banks to help protect people from losing their homes.

By the summer of 1932, the Great Depression had begun to show signs of improvement, but many people in the United States still blamed President Hoover. With the Presidential election approaching, the Democratic candidate, New York Governor Franklin D. Roosevelt, exuded hope and optimism, and promised the people a "New Deal." Hoover, defending his record, came across as pessimistic and defeated. In November, Roosevelt won in a landslide.

1933

The Great Depression (3)

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The Banking Crisis, 1933.

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The Banking Crisis, 1933.

Four long months intervened between the election and Roosevelt's inauguration. Economic signs that had looked so promising in the summer of 1932 trended downward, unemployment went up, and banks failed at an alarming rate. As weak banks closed their doors, nervous depositors began withdrawing cash from even the soundest banks, but Congress refused to enact Hoover’s plans to stem the panic. When Roosevelt was inaugurated on March 4, 1933, the banking system was near total collapse, and unemployment had reached 25%. Within days, Congress passed and FDR signed into law the Emergency Banking Relief Act, which stemmed the panic and restored confidence in the financial system – and was almost identical to legislation Hoover had proposed weeks before. Despite all the efforts of Roosevelt's "New Deal," the Depression persisted seven more years, until World War II stimulated the economy with increased demand for commodities and war materials.

The Great Depression (2024)

FAQs

What was the Great Depression answers? ›

The Depression was the longest and deepest downturn in the history of the United States and the modern industrial economy. The Great Depression began in August 1929, when the economic expansion of the Roaring Twenties came to an end. A series of financial crises punctuated the contraction.

What thrived during the Great Depression? ›

Demand for alcohol was up and supply was down! I'm sure investors that had a lot of money were able to buy real estate on the cheap. The car companies continued to boom and grow. Mass car production was new in the 1920s, and the interesting thing is that sales continued without a hitch throughout the Great Depression.

How did Americans respond to the Great Depression? ›

Blaming Wall Street speculators, bankers, and the Hoover administration, the rumblings of discontent grew mightily in the early 1930s. By 1932, hunger marches and small riots were common throughout the nation.

Who best survived the Great Depression? ›

Farm Families and the Great Depression

Farm families were often better suited to weather hard times than town residents. Farmers could grow their own food in large gardens and raise livestock to provide meat. Chickens supplied both meat and eggs, while dairy cows produced milk and cream.

What is Great Depression in short answer? ›

The Great Depression is referred to as the greatest and also the longest economic downturn or recession in modern history. It started in the USA. After that, it had a rippling effect on the economies of the world. It is said that the Great Depression started with the USA stock market crash in October 1929.

What exactly caused the Great Depression? ›

Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.

What sells during depression? ›

Toothpaste, deodorant, shampoo, toilet paper, and other grooming and personal care items are always in demand. Offering these types of items can position your business as a vital resource for consumers during tough times. People want to look good, even when times are tough.

Who got rich in the Great Depression? ›

Business titans such as William Boeing and Walter Chrysler actually grew their fortunes during the Great Depression.

Is a depression coming? ›

ITR Economics is projecting that the next Great Depression will begin in 2030 and last well into 2036. However, we do not expect a simple, completely downward trend throughout those years. There will be signs of slight growth that pop up during this period.

What ended the Great Depression? ›

Despite all the President's efforts and the courage of the American people, the Depression hung on until 1941, when America's involvement in the Second World War resulted in the drafting of young men into military service, and the creation of millions of jobs in defense and war industries.

Will we have another Great Depression? ›

The next Great Depression will start in 2030 and likely last through 2036. After this six-year period of economic decline, it will take roughly four years to fully climb up from that low point and get to where we were before the Great Depression began.

Who was worst hit by the Great Depression? ›

The country's most vulnerable populations, such as children, the elderly, and those subject to discrimination, like African Americans, were the hardest hit. Most white Americans felt entitled to what few jobs were available, leaving African Americans unable to find work, even in the jobs once considered their domain.

Did families sell their children during the Great Depression? ›

At first I couldn't understand why parents were selling their children versus finding someone that could take care of them, but they were starving. “Even decent, well-meaning people could make poor choices under pressure.”

Did crime spike during the Great Depression? ›

There was an increase in levels of violent crime during the early years of the depression, but that was followed by a decline in crime in the later years, which raises questions about crime's relationship to the economy.

What was the Great Depression quizlet? ›

Great Depression. The economic crisis and period of low business activity in the U.S. and other countries, roughly beginning with the stock-market crash in October, 1929, and continuing through most of the 1930s.

What was the Great Depression in a paragraph? ›

The Great Depression was the worst economic downturn in US history. It began in 1929 and did not abate until the end of the 1930s. The stock market crash of October 1929 signaled the beginning of the Great Depression. By 1933, unemployment was at 25 percent and more than 5,000 banks had gone out of business.

What was the Great Depression for kids? ›

For Kids - What was the Great Depression? The period from 1929 to 1941 was a time when America's economy was not working. Many banks failed, many people lost their homes, and many farmers lost their farms. The Great Depression was worldwide, although it hit the USA the hardest and the longest.

What questions do people have about the Great Depression? ›

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  • What were the primary causes of the Great Depression?
  • What economic conditions were prevalent prior to the Great Depression?
  • What political issues did America face prior to the Great Depression?
  • What social issues did America face prior to the Great Depression?

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