Americans have experienced hard times and loss of life during much of its history which has included wars and challenges. However, the Great Depression is the only time that a majority of its citizens all shared in complete and total devastation.
This was an economic crisis that began in the 1930’s and because the U.S. was a major player in the economic balance, the fallout quickly spread to most of the rest of the world.
People all across the country were out of work, lost their homes, and experienced hunger.
Those that resided in the cities would struggle the most, many standing in soup kitchen lines just to get a meal. While the farmers weren’t that much better off, most had some food that they grew.
Add to this horror that many had plowed under all of the natural resources in the Midwest to grow crops and when a drought hit, it turned huge areas into dust that blew into huge dust storms that covered everything.
This was a dark time in America and many wondered if the country would survive.
An Economy Based on Stocks
The United States had grown to the point of incredible wealth for many. The economy was being balanced on the good fortune of the stock market, with little in the way of checks and balances.
The stocks kept going up which made people rich, but there had to be an end somewhere. The Great Depression was the result of the stock market crash of October, 1929.
There are a number of reasons for the crash including bank failures, drought, consumer debt, and producing more goods than needed.
Presidential Blame and Credit
When Great Depression hit, President Herbert Hoover was President and many blame him for not introducing legislation that would have pulled back the reigns.
As the more people became increasingly desperate the homeless lived in shantytowns that they named “Hoovervilles” after the President.
By the time that Franklin D. Roosevelt was elected President, the country was in very poor condition and he knew that drastic measures needed to be taken.
Roosevelt instituted the “New Deal” which offered government sponsored job programs as well as a series of programs, laws and agencies to assist people and the country in getting through the problems.
Regulations were set on banks, stock markets and businesses to avoid the same behavior that caused the depression. Additional laws were put in place that are still used today, including the Social Security Act which requires that we each pay into the government program all of our working lives so that when we get older, we can have an income.
War Generates Business
The Great Depression might have continued for a longer period of time had it not been for World War II.
The demands of an economy to support the war effort opened a lot of jobs and created factories to begin production again. The lessons learned from the Great Depression are many and yet the benefits that came out of the necessity of the “New Deal” include areas that government was previously not involved with.
The infrastructure that we have, schools, parks, airports, public works, and even bridges were all developed due to the Great Depression.
Facts about the Great Depression:
- During the Great Depression an average family had their income drop by 40%.
- Between 1929 and 1933, the stock market saw the loss of around 90% of its value.
- Nearing $1 billion in bank deposits were lost due to the closing of banks.
- Many people were left without any of their savings money as almost 11,000 banks failed during the Great Depression.
- The unemployment rate of 1929 was nearing 3%. By 1933, the unemployment rate was 25%, leaving 1 in every 4 people jobless.
- During the Great Depression, it’s estimated that nearing 300,000 companies went out of business.
- The hardest years of the Great Depression were from 1932 through 1933.
- Hundreds of thousands of people couldn’t pay their home mortgages and were evicted, increasing homelessness and the poor to unheard of numbers.
- Known as his “First Hundred Days”, President Roosevelt shoved through 15 major laws in an attempt to help the country get through the Great Depression.