The Great Depression

Good Essays
1929 and 1939 was the deepest and longest-lasting economic decline in the history of the Western industrialized world. The Great Depression began, after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors. Over the next couple years, consumer spending and investments dropped, causing steep declines in industrial output and rising levels of unemployment as failing companies lay off their workers. In 1933, when the Great Depression reached its all-time low, 13 to 15 million Americans were unemployed and almost half of the country’s banks had failed. Though the relief and reform measures put into place by President Franklin D. Roosevelt helped lessen the worst effects of the Great Depression, the economy did not fully turn around until after 1939, when World War II kicked American industry into high gear.

The American economy entered an ordinary recession during the summer of 1929, as consumer spending dropped and unsold goods began to pile up, slowing production. Stock prices continued to rise, and by the fall of that year had reached levels that could not befitting by predicted future earnings. On October 24, 1929, the stock market bubble had finally burst, as investors began dumping shares all together. A record 12.9 million shares were traded that day, which is known as Black Thursday. Five days later, 16 million shares were traded after yet another wave of panic which swept Wall Street, which was called Black Tuesday. Millions of shares ended up worthless, and those investors who had bought stocks with borrowed money were then wiped out completely.

As consumer confidence vanished in the wake of the stock market crash, the decline in spending and investment led factor...

... middle of paper ...

...oject Administration, a permanent jobs program that employed 8.5 million people from 1935 to 1943 also aided in the recovery. In the depression period hardships had fueled the rise of extreme political movements in various European countries, most remarkably that of Adolf Hitler’s Nazi government in Germany. The Great Depression and the New Deal changed the relationship between Americans and their governments forever. Government involvement and responsibility in caring for the needy and regulating the economy came to be expected.

Works Cited
Get Access