The Great Depression Causes And Effects

The Great Depression represents one of the darkest periods in American economic history. Most people think the Great Depression started in October 1929, with the famous Black Tuesday stock market crash, but economists and historians point to an economic downturn which took hold in early 1929. The stock market crash led to unprecedented runs on banks, and by 1933, more than 11,000 of the nation’s 25,000 banks had failed.

Franklin D. Roosevelt’s New Deal is largely credited with bringing America out of the Great Depression by providing jobs and relief, but in truth, the country didn’t fully recover until 1941, when munitions and ammunition factories geared up for World War II.

That means the Great Depression timeline spanned approximately twelve years, with unemployment reaching its highest point in 1933, when 25% of American workers were idle. Photos of the Great Depression depict harsh conditions, for men, women, and children.

From 1930-1936, American farmers struggled with conditions of the Dust Bowl, a drought that affected more than a million acres of farmland, and the result was mass migrations of people from rural lands to urban areas.
As we face tough economic times today and economic stimulus packages are being introduced right and left, it’s interesting to look at then and now Great Depression comparisons.

Read on...because the answers to our economic future may very well already have been forged in the past!

Please note: If you're interested in history, check out this great site about the Titanic sinking, including facts, history, and mistakes.


Great Depression Facts

-At its highest point during the Great Depression, unemployment reached 25% (in 1933).


-The Great Depression began in 1929 and ended in 1941 when America prepared to enter World War II.

-Social Security, a program that continues to this day, was introduced by Franklin D. Roosevelt in the midst of the Great Depression.


-The “Roaring Twenties” weren’t roaring for everyone. By 1929, 1% of Americans controlled 40% of the wealth in this country.


The Federal Deposit Insurance Corporation (FDIC) was formed in 1934 to insure deposits in banks and restore customers’ faith in the American banking system.

The Dust Bowl years spanned 1930-1936, when a million acres of farmland across the Plains became worthless due to severe drought and overfarming.


-After the stock market crash in 1929, it took 27 years to reach pre-crash levels.


-In 1939, the unemployment rate in America had dropped from a high of 25% to 15%, largely due to the New Deal programs introduced by Franklin D. Roosevelt.


-Tuesday, October 29, 1929 is known as Black Tuesday because of the plunge the stock market took, and it largely symbolizes the start of the Great Depression, though the economy had been in decline for at least six months prior to that date.


-By 1933, more than 11,000 of the nation’s 25,000 American banks had shuttered, victims of the Great Depression.


-Hoovervilles were the catchphrase for the shantytowns that cropped up across the United States, as homeless Americans improvised with scraps, abandoned cars, and packing crates.


-At its highest point during the Great Depression, unemployment reached 25% (in 1933).


-The Great Depression began in 1929 and ended in 1941 when America prepared to enter World War II.


-The Great Depressions of 2008 and 2009 undoubtedly would have been worse without the $700 billion and $770 billion stimulus packages from President Bush and President Obama (not to mention bailouts of the automakers, AIG, and Fannie Mae and Freddie Mac).


-In March 2012, it was reported that 4 out of 15 of the major U.S. banks (including Citigroup) wouldn’t survive another severe recession, much less a depression.


-Photos of the Great Depression depict farmers coping during the Dust Bowl years, FDR work programs, and people standing in line at soup kitchens. Photos that would capture today’s depression include real estate and foreclosure signs, unemployed people at job fairs, and several generations of families living under the same roof.