Great Depression: Key Facts
The Great Depression began in the United States in 1929 and spread worldwide. It was the longest and most severe economic downturn in modern history, lasting until about 1939.
Black ThursdayPeople gather on the steps of a building across from the New York Stock Exchange on Black Thursday, October 24, 1929. Black Thursday marked the start of the stock market crash in the United States.
Keystone—Hulton Archive/Getty ImagesThe stock market crash led to a major decline in spending as people worried about the future of the economy. As a result of decreased consumer and business spending, industrial production declined 47 percent, and the real gross domestic product (GDP) fell 30 percent.
The drop in spending ultimately led to a decline in employment. At the height of the depression, unemployment exceeded 20 percent.
The United States experienced four waves of banking panics that took a major toll on the American banking system. By 1933 one-fifth of the banks in existence at the start of 1930 had failed.
The Federal Reserve did little to help stop the downturn, allowing the panics to reduce the U.S. money supply. It also tightened the money supply and raised interest rates in September 1931.
The gold standard, a system that measures the standard unit of currency to a fixed quantity of gold, linked other countries’ currencies to the U.S. dollar and played a major role in spreading the downturn globally.
Also contributing to the global spread of the economic crisis was a reduction in international trade and lending from the United States. Britain’s decline in production was about one-third that of the United States. Germany’s drop in production was nearly equal to that of the United States. The passage of the Smoot-Hawley Tariff Act (1930) further affected international trade.
Texas dust cloudsDust clouds over the Texas Panhandle, photograph by Farm Security Administration photographer Arthur Rothstein, March 1936.
Library of Congress, Washington, D.C.Great Depression: breadlineBreadline in New York City's Bryant Park during the Great Depression.
Encyclopædia Britannica, Inc.Makeshift towns of poorly built shelters made from scrap wood, cardboard, and tin housed the many families who became homeless. These “towns” were called Hoovervilles, named after U.S. President Herbert Hoover.
Franklin D. Roosevelt succeeded Hoover as U.S. president in 1933. Roosevelt’s New Deal program was an economic recovery plan that established federal programs for relief and reform. The New Deal created about 8.5 million jobs for people in building roads, schools, airports, and other public works.
Political instability in Europe during the economic crisis led to the growth of totalitarianism and the rise of Adolf Hitler and the Nazi Party.
Migrant MotherMigrant Mother is Dorothea Lange's most famous photograph. It was taken in Nipomo, California, in 1936, during the Great Depression.
Library of Congress, Washington, D.C.Although economic production grew in the mid-1930s and millions of people found jobs in government programs, the United States experienced another downturn in 1937–38. Full economic recovery returned in 1942.
Among the factors that led to recovery were the abandonment of the gold standard and an increase in currency supply, increased government spending on jobs and social welfare programs, and, in the United States, increased military spending prior to World War II.
The Great Depression ended in most affected countries by 1933, but many countries did not fully recover until the late 1930s or early 1940s.
Great Depression: Timeline
Great Depression | Timeline
Great Depression: Causes and Effects
Great Depression | Causes and Effects