Building Today's America: The Great Depression

The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries, it started in 1929 and lasted until the late 1930s. It was the longest, deepest, and most widespread depression of the 20th century.

The Great Depression is commonly used as an example of how far the world's economy can decline. The depression originated in the U.S., after a major fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday). Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. By comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession. Some economies started to recover by the mid-1930s. However, in many countries, the negative effects of the Great Depression lasted until the beginning of World War II.

The Great Depression had devastating effects in both rich and poor countries. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.

Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming communities and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most.

The Great Depression ended at different times in different countries. The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. In some states, the desperate citizens turned toward nationalist demagogues—the most infamous example being Adolf Hitler—setting the stage for World War II in 1939.

The causes of the Great Depression are complex and still debated by historians. However, some of the most commonly cited causes include:

The stock market crash of 1929: The stock market crash of 1929 was a major turning point in the Great Depression. The crash wiped out millions of investors and led to a loss of confidence in the economy.
The Smoot-Hawley Tariff Act of 1930: The Smoot-Hawley Tariff Act of 1930 was a protectionist trade policy that raised tariffs on imported goods. The act led to a decline in international trade and made the Great Depression worse.
The Dust Bowl: The Dust Bowl was a period of severe drought and dust storms that hit the American Midwest in the 1930s. The Dust Bowl caused widespread crop failures and led to the displacement of millions of people.
The lack of government intervention: The U.S. government did not take any major steps to address the Great Depression until 1933, when President Franklin D. Roosevelt took office. Roosevelt's New Deal programs helped to alleviate some of the suffering caused by the Great Depression, but they did not fully solve the problem.
The Great Depression had a profound impact on the world. It led to the rise of fascism in Europe, the outbreak of World War II, and the Cold War. The Great Depression also led to a number of changes in economic policy, including the creation of the Social Security system in the United States and the Bretton Woods system of international monetary cooperation.

The Great Depression was a major turning point in history. It showed the world the dangers of economic instability and the importance of government intervention in the economy. The Great Depression also led to a number of changes in economic policy that helped to prevent a similar crisis from happening again.