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The Great Depression Unemployed men queued outside a soup kitchen opened in Chicago by Al Capone The storefront sign reads 'Free Soup

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Groups of depositors in front of the closed American Union Bank, New York City. April 26, 1932. Great Depression run on bank crowd

Causes of the Great Depression

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Great Depression: Timeline

Written and fact-checked by The Editors of Encyclopaedia Britannica

1928

Herbert Hoover is elected 31st president of the United States.

Late Summer 1929

A recession hits the United States in the summer of 1929. From 1921 to 1929, the stock market had quickly expanded, with stock prices soaring to levels that were beyond what they were worth. The Federal Reserve raised interest rates in an attempt to slow the rapid rise in stock prices.

October 1929

stock market crash of 1929A crowd gathering outside the New York Stock Exchange following the stock market crash in October 1929.
Pacific and Atlantic Photos, Inc./Library of Congress, Washington, D.C. (LC-USZ62-123429)

Stock prices decline. The market goes into a free fall, and a wild rush to sell stocks begins. On October 24, known as Black Thursday, panicked investors sell a record 13 million shares of stock. Tuesday, October 29—Black Tuesday—extends the damage. On this day more than 16 million shares are sold. The value of most shares of stock falls dramatically, leading to the Great Crash of 1929.

Early 1930s

Great Depression: dust stormA dust storm approaches Stratford, Texas, in April 1935.
George E. Marsh Album/NOAA

Signs of economic depression begin around the world. After struggling with low growth and recession in the late 1920s, Great Britain sinks deeper into a drastic depression. Germany’s industrial production declines as much as the United States’ production. In the United States at this time, the Great Plains suffers a severe drought that lasts several years. Conditions in this region—referred to as the Dust Bowl—worsen when heavy dust storms hit, carrying the soil into the air and creating “black blizzards.”

June 17, 1930

Hoover signs the Smoot-Hawley Tariff Act against the advice of leading economists who petition against the law. The Smoot-Hawley Tariff Act raises taxes on imports in an effort to protect businesses and farmers by reducing foreign competition. The new tariffs prompt a backlash by foreign governments.

Fall of 1930

The first of four banking panics begins. A banking panic occurs when people who had deposited their money in banks lose confidence in the security of the banks and withdraw their cash. The United States experiences three more banking panics, in the spring of 1931, in the fall of 1931, and in the fall of 1932. This last panic continues through the winter of 1933.

1930–31

HoovervilleDuring the Great Depression, many homeless people had to build their own shelters out of whatever materials they could find. Shantytowns, or clusters of these shelters, sprang up. These “towns” were also known as Hoovervilles, named for U.S. President Herbert Hoover. The photograph shows a Hooverville in Seattle, Washington, sometime between 1932 and 1937.
Washington State Archives/Digital Archives

President Hoover opposes direct federal relief programs for individuals and attempts to alleviate the effects of the depression by appealing to state and local governments. In 1931 he supports the formation of the Reconstruction Finance Corporation (RFC) to help banks and industries. The economy doesn’t improve, and people begin to blame Hoover for the disaster. Homeless families live in poorly constructed shelters in towns they call “Hoovervilles.”

1932

In the 1932 U.S. presidential election Hoover loses to Democratic challenger Franklin D. Roosevelt. Roosevelt wins with an overwhelming majority, carrying 472 electoral votes to Hoover’s 59 electoral votes.

March 6, 1933

President Roosevelt takes immediate action once in office and declares this day as national bank holiday, which closes all banks until they are declared secure by government agencies.

1933–35

Works Progress Administration: museum aidMuseums in the United States were among the beneficiaries of Works Progress Administration (WPA) programs during the 1930s. The WPA was an agency of the New Deal.
Great Museums Television (A Britannica Publishing Partner)

Recovery in the United States begins. President Roosevelt’s New Deal establishes programs, such as the Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC), to provide federal aid and temporary jobs. Other agencies are established to revitalize business and agriculture. Financial regulatory agencies, such as the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC), are also created.

1937–38

The United States is hit with another severe economic downturn.

1938–42

After the 1937–38 recession the U.S. economy gets back on a recovery path, and production finally returns to its predepression numbers by 1942. Recovery in the rest of the world varies greatly. The economies of Great Britain, Germany, and Japan had begun to recover by the end of 1932. France, however, does not move into a recovery phase until 1938.

Great Depression: Key Facts

Great Depression | Key Facts

Great Depression: Causes and Effects

Great Depression | Causes and Effects