The Great Depression in the United States refers to a significant event in the 1930s that led to widespread economic hardship for most working-class people and businesses. It had a profound impact on the United States and impacted both domestic and foreign policies of the time. For instance, American President, Franklin D. Roosevelt, famously implemented his ‘New Deal’ policies during this time. As well, the Great Depression was closely followed by the events of World War II.
WHAT WAS THE GREAT DEPRESSION?
In general, the Great Depression was a worldwide economic recession that occurred primarily during the 1930s. A recession is a term that refers to a general economic downturn resulting in high levels of unemployment and a loss in consumer spending. As a result, during the Great Depression, many people struggled to find work while businesses struggled to survive with an overall reduction in the sales of goods and services. Historians have identified several different causes of the events of the Great Depression, including: the stock market crash of 1929, the purchasing of stocks on margin, the wide income gap between the wealthy and the poor, the loss of consumer spending, the failure of banks to deal with the crisis, protectionism and the weather conditions of the American Midwest.
ECONOMICS BEFORE THE GREAT DEPRESSION IN THE UNITED STATES
As stated above, the Great Depression had a profound impact on the world, but was particularly important to the history of the United States. The time period before the Great Depression in the United States is referred to as the ‘Roaring Twenties’. This term is used to describe the 1920s and the booming economy that occurred at that time. For example, some statistics show that the United States’ economy grew by over 40% during the decade of the 1920s. This was due in part to increased consumer sales and construction in these areas following the events of World War I. Sales of new automobiles and other consumer goods also helped create jobs and economic prosperity. This economic boom was marked by high levels of employment and strong consumer spending. For instance, despite a short recession at the beginning of the 1920s, American unemployment generally stayed around 5%. These rates make the 1920s a period that had historically low unemployment. The economic boom of the 1920s led to innovations in many industries, such as: automobiles, aviation, and movies. As such, the Roaring Twenties was also a time of great cultural change and expression. However, the good times of the Roaring Twenties came to an end in October of 1929 with the crash of the Stock Market.
STOCK MARKET CRASH OF 1929
Most historians identify the stock market crash in October of 1929 as the start of the Great Depression in the United States. Beginning on October 24th, also known as ‘Black Thursday’, the New York Stock Exchange began to experience volatility and heavy trading which resulted in a large drop of the overall value of the market. Over the next several days, prominent American bankers attempted to slow the drop in the market, but all of their attempts only supplied temporary relief. Finally, on October 29th, also known as ‘Black Tuesday’, the market took another significant drop and the panic of the stock market crash reached its peak. In total, the market had lost over $30 billion with nearly $14 billion being lost on October 29th, alone. The crash saw the market lose over one third of its total value and led to several other major economic issues that furthered the recession, including: loss of consumer spending, increase in overall unemployment, and bank runs and closures. The Great Depression in the United States had begun.
HERBERT HOOVER – PRESIDENT OF THE UNITED STATES
As the Great Depression unfolded the United States President, Herbert Hoover, held a general view of the economy based on self-reliance. This means that he believed it was the responsibility of individuals to take care of themselves and not rely on assistance from the government. As such, he did not agree that the government should intervene in the economy and referred to the economic hardship of the Great Depression as “a passing incident”. As a result of his presidency, many working-class people in the United States began to name aspects of their poverty after Hoover. For example, shanty-towns that were constructed on the edge of cities in the 1930s were often referred to as ‘Hoovervilles’. In the 1932 presidential election, Hoover faced off against Democratic candidate Franklin D. Roosevelt. Roosevelt offered a completely different view of the recession and ran on the platform of a ‘New Deal’ for the American people. With unemployment over 20% in 1932, Roosevelt blamed the worsening economic conditions on Hoover’s mishandling of the crisis. As a result, Roosevelt won the election in a landslide victory winning 472 electoral votes to Hoover’s 59. Roosevelt also dominated the popular vote with 23 million votes to Hoover’s 16 million. Roosevelt’s election is significant because he practiced a completely different economic practice than the earlier Herbert Hoover.
FRANKLIN D. ROOSEVELT – PRESIDENT OF THE UNITED STATES
By the time he entered the White House, the Great Depression in the United States had reached desperate levels, with over 13 million American people unemployed. As a result, Roosevelt had to make drastic changes. So, as part of his role, Roosevelt put a number of New Deal programs and reforms in place. The New Deal was a series of government initiatives and programs aimed at ending the economic devastation of the Great Depression. Many historians agree that the New Deal included two distinct stages. The First New Deal occurred from 1933, when Roosevelt took office, until 1934 and focused on issues related to banking. The Second New Deal occurred from 1935 until 1938 and focused on several important programs including the Social Security Act. In general, Roosevelt’s plan was for the federal government to spend money in an attempt to achieve three goals: economic recovery, job creation, and investment in public works projects. Thanks to the policies, Roosevelt led the United States through the Great Depression, and by 1935 the country showed signs of economic recovery. Roosevelt supported much more government intervention in the economy than did Hoover. As a result, Roovelt’s New Deal policies shifted the United States left on the economic spectrum and led to several democratic socialist policies. In general, socialism is a left-wing economic system that favors government intervention in the economy in order to try to solve economic issues. At the time, socialist policies were popular around the world and were causing many countries to change their policies. American politics and economics had been much more right-wing in the decades before the Great Depression. This meant that the United States was based upon the principles of capitalism, which is the idea that the government should play as little a role as possible in the economy and allow people to have more control over their own economic wellbeing. The policies of Roosevelt and the creation of the New Deal fundamentally shifted the United States left on the economic spectrum to a form of capitalism that economists refer to as the Welfare State. Regardless, the Great Depression ended in the late 1930s with the outbreak of World War II.
GREAT DEPRESSION IN THE UNITED STATES – DUST BOWL
Another important part of the Great Depression in the United States was the history and significance of the Dust Bowl. The Dust Bowl is the term used to refer to the drought conditions that occurred across North America during the 1930s and the time period of the Great Depression. Also referred to as the Dirty Thirties, the Dust Bowl affected over 100,000,000 acres of agricultural land across Canada and the United States. In the United States, it was generally centered on farms in Colorado, Kansas, Oklahoma and Texas. This region of the United States was a historically dry area and received a relatively low amount of rain per year. As well, the area had a thin layer of top soil that had traditionally only supported dry grasses. As such, it was not ideal for extensive farming which was one of the causes for the devastation of many farms at the time. For example, farming practices used at the time that led to the ‘over-farming’ of the region included: deep plowing and mechanization. When strong winds hit the region, it quite literally caused entire fields to be swept away across the country. The dust was lifted high into the air and caused a blackening of the sky, and many people referred to them as ‘black blizzards’. Throughout the 1930s, many wind storms destroyed the farms on the plains of Canada and the United States, and were so powerful that dust affected major cities, such as: Chicago and New York. Because of the Dust Bowl, many families were forced from their farms. Farmers had already been struggling due to small family farms being bought out and replaced by larger ones which relied more on mechanization. As such, when the drought hit the area many were unable to pay their debts and forced off of the land by the banks. In total, the Dust Bowl left over half a million Americans homeless and caused a migration of over three million people out the American Midwest. Famously, many of them relocated to the west coast in hopes of finding employment in other agricultural work, but were often met with the harsh unemployment caused by the Great Depression, which was devastating all parts of the country at that time. Entire families loaded all of their belongings onto their vehicles as they made the arduous journey out of the drought-stricken area. The Dust Bowl migration remains the largest migration in United States history, which occurred over a relatively short period of time.
