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Essays on Great Depression

Great depression essay topic examples, argumentative essays.

Argumentative essays on the Great Depression require you to take a stance on a specific aspect of this historical event and provide evidence to support your viewpoint. Consider these topic examples:

• 1. Argue for the primary causes of the Great Depression, emphasizing the role of economic policies, banking practices, and global factors in triggering the crisis.
• 2. Debate the effectiveness of New Deal programs in alleviating the suffering of Americans during the Great Depression, discussing their long-term impact on the nation's economy and social fabric.

Example Introduction Paragraph for an Argumentative Great Depression Essay: The Great Depression remains a defining moment in American history, marked by economic turmoil and widespread suffering. In this argumentative essay, we will examine the primary causes of the Great Depression, focusing on economic policies, banking practices, and global factors that contributed to this devastating crisis.

Example Conclusion Paragraph for an Argumentative Great Depression Essay: In conclusion, the analysis of the Great Depression's causes underscores the complexity of this historical event. As we reflect on the lessons learned from this era, we are reminded of the importance of sound economic policies and vigilant oversight in preventing future economic crises.

Compare and Contrast Essays

Compare and contrast essays on the Great Depression involve analyzing the similarities and differences between various aspects of the era, such as its impact on different countries or the approaches taken to address the crisis. Consider these topics:

• 1. Compare and contrast the effects of the Great Depression on the United States and Germany, examining the economic, social, and political consequences in both nations.
• 2. Analyze and contrast the approaches taken by Franklin D. Roosevelt's New Deal and Adolf Hitler's economic policies in response to the Great Depression, exploring their divergent ideologies and outcomes.

Example Introduction Paragraph for a Compare and Contrast Great Depression Essay: The Great Depression had a global impact, affecting nations differently and prompting diverse responses. In this compare and contrast essay, we will explore the effects of the Great Depression on the United States and Germany, examining the economic, social, and political consequences in both countries.

Example Conclusion Paragraph for a Compare and Contrast Great Depression Essay: In conclusion, the comparison and contrast of the Great Depression's effects on the United States and Germany reveal the profound and lasting consequences of economic crises. As we study these different experiences, we gain insights into the resilience of nations facing adversity.

Descriptive Essays

Descriptive essays on the Great Depression allow you to provide detailed accounts and analysis of specific aspects, events, or individuals during this period. Here are some topic ideas:

• 1. Describe the everyday life of a typical American family during the Great Depression, detailing their struggles, coping mechanisms, and aspirations for a better future.
• 2. Paint a vivid picture of a significant event from the Great Depression era, such as the Dust Bowl or a famous protest, discussing its impact on society and the lessons learned.

Example Introduction Paragraph for a Descriptive Great Depression Essay: The Great Depression left an indelible mark on the lives of ordinary Americans, shaping their daily experiences and aspirations. In this descriptive essay, we will delve into the everyday life of a typical American family during this challenging period, exploring their struggles and hopes for a brighter future.

Example Conclusion Paragraph for a Descriptive Great Depression Essay: In conclusion, the descriptive exploration of a typical American family's life during the Great Depression reminds us of the resilience and determination of individuals in the face of adversity. As we reflect on their experiences, we are inspired by their unwavering spirit.

Persuasive Essays

Persuasive essays on the Great Depression involve advocating for specific actions, policies, or changes related to economic recovery, social welfare, or preventing future economic crises. Consider these persuasive topics:

• 1. Persuade your audience of the importance of implementing social safety net programs to prevent another Great Depression-like economic catastrophe, highlighting the potential benefits and challenges of such initiatives.
• 2. Advocate for increased financial literacy education in schools as a means to empower individuals with the knowledge and skills to make informed financial decisions, potentially preventing future economic crises.

Example Introduction Paragraph for a Persuasive Great Depression Essay: The lessons of the Great Depression continue to shape economic and social policies today. In this persuasive essay, I will make a compelling case for the implementation of social safety net programs aimed at preventing future economic catastrophes like the Great Depression, emphasizing the potential benefits and challenges of such initiatives.

Example Conclusion Paragraph for a Persuasive Great Depression Essay: In conclusion, the persuasive argument for social safety net programs underscores the importance of proactive measures to safeguard against economic crises. As we advocate for change, we contribute to a more resilient and equitable society.

Narrative Essays

Narrative essays on the Great Depression allow you to share personal stories, experiences, or observations related to this historical period, your family's history during the era, or the impact of the Great Depression on your community. Explore these narrative essay topics:

• 1. Narrate a family story or anecdote passed down through generations about how your family coped with the challenges of the Great Depression, highlighting the resilience and resourcefulness of your ancestors.
• 2. Share a personal narrative of how the Great Depression era shaped the values and principles of your community, discussing the lasting impact on your town or neighborhood.

Example Introduction Paragraph for a Narrative Great Depression Essay: The Great Depression was not just a historical event; it was a period that defined the experiences and values of countless individuals and communities. In this narrative essay, I will share a family story that has been passed down through generations, illustrating how my family coped with the challenges of this era and the lasting impact on our values.

Example Conclusion Paragraph for a Narrative Great Depression Essay: In conclusion, the narrative of my family's experience during the Great Depression serves as a reminder of the resilience and resourcefulness that emerged during this challenging period. As we reflect on our history, we find inspiration in the strength of those who came before us.

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New Deal Programs During The Great Depression

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The Great Depression in The USA

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1929 - c. 1939

Europe, United States

Franklin D. Roosevelt: As the President of the United States from 1933 to 1945, Roosevelt implemented the New Deal, a series of economic and social programs aimed at alleviating the effects of the Great Depression. John Steinbeck: An influential American author, Steinbeck wrote novels such as "The Grapes of Wrath" (1939), which depicted the plight of migrant workers during the Great Depression. His work shed light on the social and economic injustices faced by many Americans during that time. Dorothea Lange: A renowned documentary photographer, Lange captured powerful images of individuals and families affected by the Great Depression. Her iconic photograph "Migrant Mother" became a symbol of the hardships faced by ordinary Americans. Eleanor Roosevelt: The wife of President Franklin D. Roosevelt, Eleanor Roosevelt was a prominent advocate for social and economic reform. She played an active role in promoting the New Deal policies and was a strong voice for marginalized communities during the Great Depression.

The Great Depression, one of the most severe economic crises in history, occurred during the 1930s. It started in the United States with the stock market crash of 1929, often referred to as "Black Tuesday." This event led to a chain reaction of economic downturns worldwide, resulting in high unemployment rates, widespread poverty, and a significant decline in industrial production. The effects of the Great Depression were felt across various sectors, including agriculture, manufacturing, and banking.

The Great Depression was preceded by a series of factors that set the stage for its occurrence. In the aftermath of World War I, the global economy experienced a period of instability and rapid growth known as the Roaring Twenties. However, beneath the surface of apparent prosperity, there were underlying vulnerabilities. One of the key factors contributing to the Great Depression was the rampant speculation in the stock market, fueled by easy credit and speculative investments. This speculative bubble eventually burst in October 1929, triggering the stock market crash and initiating a chain reaction of economic collapse. Additionally, international economic imbalances played a role in exacerbating the crisis. Protectionist trade policies, war reparations, and a decline in global trade contributed to a decline in industrial production and widespread unemployment. The collapse of the banking system further deepened the crisis, as bank failures wiped out people's savings and caused a severe liquidity crisis.

Stock Market Crash: On October 29, 1929, known as Black Tuesday, the stock market experienced a catastrophic crash, signaling the start of the Great Depression. This event led to a massive loss of wealth and investor confidence. Dust Bowl: In the early 1930s, severe drought and poor farming practices led to the Dust Bowl in the Great Plains region of the United States. Dust storms ravaged the land, causing agricultural devastation and mass migration of farmers to seek better opportunities elsewhere. New Deal: In response to the crisis, President Franklin D. Roosevelt implemented the New Deal, a series of programs and reforms aimed at providing relief, recovery, and reform. This included measures such as the creation of jobs, financial regulations, and social welfare initiatives.

Economic Collapse: The Great Depression plunged the global economy into a severe downturn. Industries faced widespread bankruptcies, trade declined, and unemployment soared. Poverty levels skyrocketed, leaving many families without basic necessities. Social Unrest: The economic hardship led to increased social unrest. Breadlines, shantytowns, and soup kitchens became common sights as people struggled to survive. Homelessness and hunger became prevalent, straining social structures. Global Impact: The Great Depression had a global reach, affecting countries around the world. International trade declined, leading to a sharp decline in exports and imports. This interconnectedness contributed to a worldwide economic slowdown. Political Shifts: The economic crisis paved the way for significant political shifts. Governments faced pressure to address the crisis, resulting in the rise of interventionist policies and increased government involvement in the economy. This gave birth to the concept of the welfare state. Cultural and Artistic Expression: The Great Depression influenced art, literature, and music, reflecting the hardships and struggles of the era. Artists and writers depicted the human suffering and the search for hope amid despair.

Literature: John Steinbeck's novel "The Grapes of Wrath" (1939) is a powerful depiction of the Great Depression's impact on migrant workers in the United States. It follows the Joad family as they face poverty, displacement, and exploitation while searching for a better life. The book explores themes of resilience, social injustice, and the human spirit in the face of adversity. Photography: The Farm Security Administration (FSA) hired photographers, including Dorothea Lange and Walker Evans, to document the effects of the Great Depression. Their iconic photographs, such as Lange's "Migrant Mother," captured the hardships faced by rural communities, evoking empathy and raising awareness about the human toll of the economic crisis. Films: Movies like "The Grapes of Wrath" (1940) and "It's a Wonderful Life" (1946) depicted the struggles and resilience of individuals and communities during the Great Depression. These films offered social commentary, showcased the impact of economic hardship, and explored themes of hope, perseverance, and the importance of human connections. Music: Artists like Woody Guthrie composed folk songs that reflected the experiences of those affected by the Great Depression. Guthrie's "This Land Is Your Land" and "Dust Bowl Blues" expressed the struggles of the working class and the desire for a more equitable society. Art: Painters such as Grant Wood and Thomas Hart Benton created works that captured the hardships and rural landscapes of the Great Depression. Wood's painting "American Gothic" became an iconic representation of the era, symbolizing the resilience and determination of the American people.

1. The Gross Domestic Product (GDP) of the United States dropped by approximately 30% during the Great Depression. 2. Between 1929 and 1932, over 9,000 banks in the United States failed, causing immense financial instability. 3. The poverty rate in the United States surged during the Great Depression. By 1933, around 15 million Americans, representing approximately 30% of the population at that time, were living below the poverty line.

The topic of the Great Depression holds significant importance as it marks a critical period in global history that profoundly impacted economies, societies, and individuals worldwide. Exploring this topic in an essay provides valuable insights into the causes, consequences, and responses to one of the most severe economic downturns in modern times. Understanding the Great Depression is essential to grasp the complexities of economic cycles, financial systems, and government policies. It allows us to reflect on the vulnerabilities of economies and the potential ramifications of economic crises. Moreover, studying the Great Depression enables us to analyze the various social, political, and cultural transformations that took place during that era, including the rise of social welfare programs, labor movements, and governmental interventions. By delving into this topic, we gain valuable lessons about resilience, adaptability, and the role of leadership during challenging times. Exploring the experiences of individuals and communities during the Great Depression also helps us empathize with their struggles and appreciate the importance of collective efforts to overcome adversity.

1. Bernanke, B. S. (1983). Nonmonetary effects of the financial crisis in the propagation of the Great Depression. The American Economic Review, 73(3), 257-276. 2. Eichengreen, B. (1992). Golden fetters: The gold standard and the Great Depression, 1919-1939. Oxford University Press. 3. McElvaine, R. S. (1993). The Great Depression: America, 1929-1941. Times Books. 4. Rothbard, M. N. (2000). America's Great Depression. Ludwig von Mises Institute. 5. Badger, A. J. (2014). The Great Depression as a revolution. The Journal of Interdisciplinary History, 44(2), 156-174. 6. Temin, P. (2010). The Great Depression: Lessons for macroeconomic policy today. MIT Press. 7. Kennedy, D. M. (1999). Freedom from fear: The American people in depression and war, 1929-1945. Oxford University Press. 8. Leuchtenburg, W. E. (2015). The FDR years: On Roosevelt and his legacy. Columbia University Press. 9. Roth, B. (2017). The causes and consequences of the Great Depression. OpenStax. 10. Galbraith, J. K. (1997). The Great Crash, 1929. Houghton Mifflin.

Relevant topics

• Industrial Revolution
• Civil Rights Movement
• Westward Expansion
• Pearl Harbor
• Manifest Destiny
• American Revolution
• Frederick Douglass

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Course: US history   >   Unit 7

• The presidency of Herbert Hoover

The Great Depression

• FDR and the Great Depression
• The New Deal

• The Great Depression was the worst economic downturn in US history. It began in 1929 and did not abate until the end of the 1930s.
• The stock market crash of October 1929 signaled the beginning of the Great Depression. By 1933, unemployment was at 25 percent and more than 5,000 banks had gone out of business.
• Although President Herbert Hoover attempted to spark growth in the economy through measures like the Reconstruction Finance Corporation, these measures did little to solve the crisis.
• Franklin Roosevelt was elected president in November 1932. Inaugurated as president in March 1933, Roosevelt’s New Deal offered a new approach to the Great Depression.

The stock market crash of 1929

Hoover's response to the crisis, what do you think.

• David M. Kennedy, Freedom from Fear: The American People in Depression and War, 1929-1945 (New York: Oxford University Press, 1999), 37-41, 49-50.
• T.H. Watkins, The Hungry Years: A Narrative History of the Great Depression in America (New York: Henry Holt, 1999), 44-45; Kennedy, Freedom from Fear , 87.
• Louise Armstrong, We Too Are the People (Boston: Little, Brown & Co., 1938), 10.
• On bank failures, see Kennedy, Freedom from Fear , 65.
• See Kennedy, Freedom from Fear , 87, 208; Robert S. McElvaine, ed., Down and Out in the Great Depression: Letters from the “Forgotten Man” (Chapel Hill: University of North Carolina Press, 1983), 81-94.
• John A. Garraty, The Great Depression: An Inquiry into the Causes, Course, and Consequences of the Worldwide Depression of the Nineteen-Thirties, as Seen by Contemporaries and in the Light of History (New York: Doubleday, 1987).
• Kennedy, Freedom from Fear , 83-85.
• On Hoovervilles and Hoover flags, Kennedy, Freedom from Fear , 91.

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The Great Depression

“Regarding the Great Depression, … we did it. We’re very sorry. … We won’t do it again.” —Ben Bernanke, November 8, 2002, in a speech given at “A Conference to Honor Milton Friedman … On the Occasion of His 90th Birthday.”

In 2002, Ben Bernanke , then a member of the Federal Reserve Board of Governors, acknowledged publicly what economists have long believed. The Federal Reserve’s mistakes contributed to the “worst economic disaster in American history” (Bernanke 2002).

Bernanke, like other economic historians, characterized the Great Depression as a disaster because of its length, depth, and consequences. The Depression lasted a decade, beginning in 1929 and ending during World War II. Industrial production plummeted. Unemployment soared. Families suffered. Marriage rates fell. The contraction began in the United States and spread around the globe. The Depression was the longest and deepest downturn in the history of the United States and the modern industrial economy.

The Great Depression began in August 1929, when the economic expansion of the Roaring Twenties came to an end. A series of financial crises punctuated the contraction. These crises included a stock market crash in 1929 , a series of regional banking panics in 1930 and 1931 , and a series of national and international financial crises from 1931 through 1933 . The downturn hit bottom in March 1933, when the commercial banking system collapsed and President Roosevelt declared a national banking holiday . 1    Sweeping reforms of the financial system accompanied the economic recovery, which was interrupted by a double-dip recession in 1937 . Return to full output and employment occurred during the Second World War.

To understand Bernanke’s statement, one needs to know what he meant by “we,” “did it,” and “won’t do it again.”

By “we,” Bernanke meant the leaders of the Federal Reserve System. At the start of the Depression, the Federal Reserve’s decision-making structure was decentralized and often ineffective. Each district had a governor who set policies for his district, although some decisions required approval of the Federal Reserve Board in Washington, DC. The Board lacked the authority and tools to act on its own and struggled to coordinate policies across districts. The governors and the Board understood the need for coordination; frequently corresponded concerning important issues; and established procedures and programs, such as the Open Market Investment Committee, to institutionalize cooperation. When these efforts yielded consensus, monetary policy could be swift and effective. But when the governors disagreed, districts could and sometimes did pursue independent and occasionally contradictory courses of action.

The governors disagreed on many issues, because at the time and for decades thereafter, experts disagreed about the best course of action and even about the correct conceptual framework for determining optimal policy. Information about the economy became available with long and variable lags. Experts within the Federal Reserve, in the business community, and among policymakers in Washington, DC, had different perceptions of events and advocated different solutions to problems. Researchers debated these issues for decades. Consensus emerged gradually. The views in this essay reflect conclusions expressed in the writings of three recent chairmen, Paul Volcke r, Alan Greenspan , and Ben Bernanke .

By “did it,” Bernanke meant that the leaders of the Federal Reserve implemented policies that they thought were in the public interest. Unintentionally, some of their decisions hurt the economy. Other policies that would have helped were not adopted.

An example of the former is the Fed’s decision to raise interest rates in 1928 and 1929. The Fed did this in an attempt to limit speculation in securities markets. This action slowed economic activity in the United States. Because the international gold standard linked interest rates and monetary policies among participating nations, the Fed’s actions triggered recessions in nations around the globe. The Fed repeated this mistake when responding to the international financial crisis in the fall of 1931. This website explores these issues in greater depth in our entries on the stock market crash of 1929 and the financial crises of 1931 through 1933 .

An example of the latter is the Fed’s failure to act as a lender of last resort during the banking panics that began in the fall of 1930 and ended with the banking holiday in the winter of 1933. This website explores this issue in essays on the banking panics of 1930 to 1931 , the banking acts of 1932 , and the banking holiday of 1933 .

One reason that Congress created the Federal Reserve, of course, was to act as a lender of last resort. Why did the Federal Reserve fail in this fundamental task? The Federal Reserve’s leaders disagreed about the best response to banking crises. Some governors subscribed to a doctrine similar to Bagehot’s dictum, which says that during financial panics, central banks should loan funds to solvent financial institutions beset by runs. Other governors subscribed to a doctrine known as real bills. This doctrine indicated that central banks should supply more funds to commercial banks during economic expansions, when individuals and firms demanded additional credit to finance production and commerce, and less during economic contractions, when demand for credit contracted. The real bills doctrine did not definitively describe what to do during banking panics, but many of its adherents considered panics to be symptoms of contractions, when central bank lending should contract. A few governors subscribed to an extreme version of the real bills doctrine labeled “liquidationist.” This doctrine indicated that during financial panics, central banks should stand aside so that troubled financial institutions would fail. This pruning of weak institutions would accelerate the evolution of a healthier economic system. Herbert Hoover’s secretary of treasury, Andrew Mellon, who served on the Federal Reserve Board, advocated this approach. These intellectual tensions and the Federal Reserve’s ineffective decision-making structure made it difficult, and at times impossible, for the Fed’s leaders to take effective action.

Among leaders of the Federal Reserve, differences of opinion also existed about whether to help and how much assistance to extend to financial institutions that did not belong to the Federal Reserve. Some leaders thought aid should only be extended to commercial banks that were members of the Federal Reserve System. Others thought member banks should receive assistance substantial enough to enable them to help their customers, including financial institutions that did not belong to the Federal Reserve, but the advisability and legality of this pass-through assistance was the subject of debate. Only a handful of leaders thought the Federal Reserve (or federal government) should directly aid commercial banks (or other financial institutions) that did not belong to the Federal Reserve. One advocate of widespread direct assistance was  Eugene Meyer , governor of the Federal Reserve Board, who was instrumental in the creation of the  Reconstruction Finance Corporation .

These differences of opinion contributed to the Federal Reserve’s most serious sin of omission: failure to stem the decline in the supply of money. From the fall of 1930 through the winter of 1933, the money supply fell by nearly 30 percent. The declining supply of funds reduced average prices by an equivalent amount. This deflation increased debt burdens; distorted economic decision-making; reduced consumption; increased unemployment; and forced banks, firms, and individuals into bankruptcy. The deflation stemmed from the collapse of the banking system, as explained in the essay on the  banking panics of 1930 and 1931 .

The Federal Reserve could have prevented deflation by preventing the collapse of the banking system or by counteracting the collapse with an expansion of the monetary base, but it failed to do so for several reasons. The economic collapse was unforeseen and unprecedented. Decision makers lacked effective mechanisms for determining what went wrong and lacked the authority to take actions sufficient to cure the economy. Some decision makers misinterpreted signals about the state of the economy, such as the nominal interest rate, because of their adherence to the real bills philosophy. Others deemed defending the gold standard by raising interests and reducing the supply of money and credit to be better for the economy than aiding ailing banks with the opposite actions.

On several occasions, the Federal Reserve did implement policies that modern monetary scholars believe could have stemmed the contraction. In the spring of 1931, the Federal Reserve began to expand the monetary base, but the expansion was insufficient to offset the deflationary effects of the banking crises. In the spring of 1932, after Congress provided the Federal Reserve with the necessary authority, the Federal Reserve expanded the monetary base aggressively. The policy appeared effective initially, but after a few months the Federal Reserve changed course. A series of political and international shocks hit the economy, and the contraction resumed. Overall, the Fed’s efforts to end the deflation and resuscitate the financial system, while well intentioned and based on the best available information, appear to have been too little and too late.

The flaws in the Federal Reserve’s structure became apparent during the initial years of the Great Depression. Congress responded by reforming the Federal Reserve and the entire financial system. Under the Hoover administration, congressional reforms culminated in the  Reconstruction Finance Corporation Act and the Banking Act of 1932 . Under the Roosevelt administration, reforms culminated in the  Emergency Banking Act of 1933 , the  Banking Act of 1933 (commonly called Glass-Steagall) , the  Gold Reserve Act of 1934 , and the  Banking Act of 1935 . This legislation shifted some of the Federal Reserve’s responsibilities to the Treasury Department and to new federal agencies such as the Reconstruction Finance Corporation and Federal Deposit Insurance Corporation. These agencies dominated monetary and banking policy until the 1950s.

The reforms of the 1930s, ’40s, and ’50s turned the Federal Reserve into a modern central bank. The creation of the modern intellectual framework underlying economic policy took longer and continues today. The Fed’s combination of a well-designed central bank and an effective conceptual framework enabled Bernanke to state confidently that “we won’t do it again.”

• 1  These business cycle dates come from the National Bureau of Economic Research . Additional materials on the Federal Reserve can be found at the website of the Federal Reserve Bank of St. Louis.

Bibliography

Bernanke, Ben. Essays on the Great Depression . Princeton: Princeton University Press, 2000.

Bernanke, Ben, “ On Milton Friedman's Ninetieth Birthday ," Remarks by Governor Ben S. Bernanke at the Conference to Honor Milton Friedman, University of Chicago, Chicago, IL, November 8, 2002.

Chandler, Lester V. American Monetary Policy, 1928 to 1941 . New York: Harper and Row, 1971.

Chandler, Lester V. American’s Greatest Depression, 1929-1941 . New York: Harper Collins, 1970.

Eichengreen, Barry. “The Origins and Nature of the Great Slump Revisited.” Economic History Review 45, no. 2 (May 1992): 213–239.

Friedman, Milton and Anna Schwartz. A Monetary History of the United States: 1867-1960 . Princeton: Princeton University Press, 1963.

Kindleberger, Charles P. The World in Depression, 1929-1939 : Revised and Enlarged Edition. Berkeley: University of California Press, 1986.

Meltzer, Allan. A History of the Federal Reserve: Volume 1, 1913 to 1951 . Chicago: University of Chicago Press, 2003.

Romer, Christina D. “The Nation in Depression.” Journal of Economic Perspectives 7, no. 2 (1993): 19-39.

Temin, Peter. Lessons from the Great Depression (Lionel Robbins Lectures) . Cambridge: MIT Press, 1989.

Written as of November 22, 2013. See disclaimer .

Essays in this Time Period

• Bank Holiday of 1933
• Banking Act of 1933 (Glass-Steagall)
• Banking Act of 1935
• Banking Acts of 1932
• Banking Panics of 1930-31
• Banking Panics of 1931-33
• Stock Market Crash of 1929
• Emergency Banking Act of 1933
• Gold Reserve Act of 1934
• Recession of 1937–38
• Roosevelt's Gold Program

Federal Reserve History

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Great Depression History

By: History.com Editors

Updated: October 20, 2023 | Original: October 29, 2009

The Great Depression was the worst economic crisis in modern history, lasting from 1929 until the beginning of World War II in 1939. The causes of the Great Depression included slowing consumer demand, mounting consumer debt, decreased industrial production and the rapid and reckless expansion of the U.S. stock market. When the stock market crashed in October 1929, it triggered a crisis in the international economy, which was linked via the gold standard. A rash of bank failures followed in 1930, and as the Dust Bowl increased the number of farm foreclosures, unemployment topped 20 percent by 1933. Presidents Herbert Hoover and Franklin D. Roosevelt tried to stimulate the economy with a range of incentives including Roosevelt’s New Deal programs, but ultimately it took the manufacturing production increases of World War II to end the Great Depression.

What Caused the Great Depression?

Throughout the 1920s, the U.S. economy expanded rapidly, and the nation’s total wealth more than doubled between 1920 and 1929, a period dubbed “ the Roaring Twenties .”

The stock market, centered at the New York Stock Exchange on Wall Street in New York City , was the scene of reckless speculation, where everyone from millionaire tycoons to cooks and janitors poured their savings into stocks. As a result, the stock market underwent rapid expansion, reaching its peak in August 1929.

By then, production had already declined and unemployment had risen, leaving stock prices much higher than their actual value. Additionally, wages at that time were low, consumer debt was proliferating, the agricultural sector of the economy was struggling due to drought and falling food prices and banks had an excess of large loans that could not be liquidated.

The American economy entered a mild recession during the summer of 1929, as consumer spending slowed and unsold goods began to pile up, which in turn slowed factory production. Nonetheless, stock prices continued to rise, and by the fall of that year had reached stratospheric levels that could not be justified by expected future earnings.

Stock Market Crash of 1929

On October 24, 1929, as nervous investors began selling overpriced shares en masse, the stock market crash that some had feared happened at last. A record 12.9 million shares were traded that day, known as “Black Thursday.”

Five days later, on October 29, or “Black Tuesday,” some 16 million shares were traded after another wave of panic swept Wall Street. Millions of shares ended up worthless, and those investors who had bought stocks “on margin” (with borrowed money) were wiped out completely.

As consumer confidence vanished in the wake of the stock market crash, the downturn in spending and investment led factories and other businesses to slow down production and begin firing their workers. For those who were lucky enough to remain employed, wages fell and buying power decreased.

Many Americans forced to buy on credit fell into debt, and the number of foreclosures and repossessions climbed steadily. The global adherence to the gold standard , which joined countries around the world in fixed currency exchange, helped spread economic woes from the United States throughout the world, especially in Europe.

Bank Runs and the Hoover Administration

Despite assurances from President Herbert Hoover and other leaders that the crisis would run its course, matters continued to get worse over the next three years. By 1930, 4 million Americans looking for work could not find it; that number had risen to 6 million in 1931.

Meanwhile, the country’s industrial production had dropped by half. Bread lines, soup kitchens and rising numbers of homeless people became more and more common in America’s towns and cities. Farmers couldn’t afford to harvest their crops and were forced to leave them rotting in the fields while people elsewhere starved. In 1930, severe droughts in the Southern Plains brought high winds and dust from Texas to Nebraska, killing people, livestock and crops. The “ Dust Bowl ” inspired a mass migration of people from farmland to cities in search of work.

In the fall of 1930, the first of four waves of banking panics began, as large numbers of investors lost confidence in the solvency of their banks and demanded deposits in cash, forcing banks to liquidate loans in order to supplement their insufficient cash reserves on hand.

Bank runs swept the United States again in the spring and fall of 1931 and the fall of 1932, and by early 1933 thousands of banks had closed their doors.

In the face of this dire situation, Hoover’s administration tried supporting failing banks and other institutions with government loans; the idea was that the banks in turn would loan to businesses, which would be able to hire back their employees.

FDR and the Great Depression

Hoover, a Republican who had formerly served as U.S. secretary of commerce, believed that government should not directly intervene in the economy and that it did not have the responsibility to create jobs or provide economic relief for its citizens.

In 1932, however, with the country mired in the depths of the Great Depression and some 15 million people unemployed, Democrat Franklin D. Roosevelt won an overwhelming victory in the presidential election.

By Inauguration Day (March 4, 1933), every U.S. state had ordered all remaining banks to close at the end of the fourth wave of banking panics, and the U.S. Treasury didn’t have enough cash to pay all government workers. Nonetheless, FDR (as he was known) projected a calm energy and optimism, famously declaring "the only thing we have to fear is fear itself.”

Roosevelt took immediate action to address the country’s economic woes, first announcing a four-day “bank holiday” during which all banks would close so that Congress could pass reform legislation and reopen those banks determined to be sound. He also began addressing the public directly over the radio in a series of talks, and these so-called “ fireside chats ” went a long way toward restoring public confidence.

During Roosevelt’s first 100 days in office, his administration passed legislation that aimed to stabilize industrial and agricultural production, create jobs and stimulate recovery.

In addition, Roosevelt sought to reform the financial system, creating the Federal Deposit Insurance Corporation ( FDIC ) to protect depositors’ accounts and the Securities and Exchange Commission (SEC) to regulate the stock market and prevent abuses of the kind that led to the 1929 crash.

The New Deal: A Road to Recovery

Among the programs and institutions of the New Deal that aided in recovery from the Great Depression was the Tennessee Valley Authority (TVA) , which built dams and hydroelectric projects to control flooding and provide electric power to the impoverished Tennessee Valley region, and the Works Progress Administration (WPA) , a permanent jobs program that employed 8.5 million people from 1935 to 1943.

When the Great Depression began, the United States was the only industrialized country in the world without some form of unemployment insurance or social security. In 1935, Congress passed the Social Security Act , which for the first time provided Americans with unemployment, disability and pensions for old age.

After showing early signs of recovery beginning in the spring of 1933, the economy continued to improve throughout the next three years, during which real GDP (adjusted for inflation) grew at an average rate of 9 percent per year.

A sharp recession hit in 1937, caused in part by the Federal Reserve’s decision to increase its requirements for money in reserve. Though the economy began improving again in 1938, this second severe contraction reversed many of the gains in production and employment and prolonged the effects of the Great Depression through the end of the decade.

Depression-era hardships fueled the rise of extremist political movements in various European countries, most notably that of Adolf Hitler’s Nazi regime in Germany. German aggression led war to break out in Europe in 1939, and the WPA turned its attention to strengthening the military infrastructure of the United States, even as the country maintained its neutrality.

African Americans in the Great Depression

One-fifth of all Americans receiving federal relief during the Great Depression were Black, most in the rural South. But farm and domestic work, two major sectors in which Black workers were employed, were not included in the 1935 Social Security Act, meaning there was no safety net in times of uncertainty. Rather than fire domestic help, private employers could simply pay them less without legal repercussions. And those relief programs for which African Americans were eligible on paper were rife with discrimination in practice since all relief programs were administered locally.

Despite these obstacles, Roosevelt’s “Black Cabinet,” led by Mary McLeod Bethune , ensured nearly every New Deal agency had a Black advisor. The number of African Americans working in government tripled .

Women in the Great Depression

There was one group of Americans who actually gained jobs during the Great Depression: Women. From 1930 to 1940, the number of employed women in the United States rose 24 percent from 10.5 million to 13 million Though they’d been steadily entering the workforce for decades, the financial pressures of the Great Depression drove women to seek employment in ever greater numbers as male breadwinners lost their jobs. The 22 percent decline in marriage rates between 1929 and 1939 also created an increase in single women in search of employment.

Women during the Great Depression had a strong advocate in First Lady Eleanor Roosevelt , who lobbied her husband for more women in office—like Secretary of Labor Frances Perkins , the first woman to ever hold a cabinet position.

Jobs available to women paid less but were more stable during the banking crisis: nursing, teaching and domestic work. They were supplanted by an increase in secretarial roles in FDR’s rapidly-expanding government. But there was a catch: over 25 percent of the National Recovery Administration’s wage codes set lower wages for women, and jobs created under the WPA confined women to fields like sewing and nursing that paid less than roles reserved for men.

Married women faced an additional hurdle: By 1940, 26 states had placed restrictions known as marriage bars on their employment, as working wives were perceived as taking away jobs from able-bodied men—even if, in practice, they were occupying jobs men would not want and doing them for far less pay.

Great Depression Ends and World War II Begins

With Roosevelt’s decision to support Britain and France in the struggle against Germany and the other Axis Powers, defense manufacturing geared up, producing more and more private-sector jobs.

The Japanese attack on Pearl Harbor in December 1941 led to America’s entry into World War II, and the nation’s factories went back into full production mode.

This expanding industrial production, as well as widespread conscription beginning in 1942, reduced the unemployment rate to below its pre-Depression level. The Great Depression had ended at last, and the United States turned its attention to the global conflict of World War II.

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The Great Depression and New Deal: A Very Short Introduction

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The Great Depression and the New Deal: A Very Short Introduction explores the roots, events, and legacy of the Great Depression and Roosevelt's New Deal. America's post-war laissez-faire economic policies resulted in an economic upheaval of unprecedented severity, to which President Roosevelt responded with a vigorous (and sometimes unconstitutional) set of Depression-fighting economic measures, which were only justifiable in the face of such a global economic disaster. Key New Deal programmes are examined, such as the National Recovery Agency, Public Works Administration, and Social Security, revealing why some worked and others did not.

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What Was the Great Depression?

The stock market crash, the u.s. economy tailspin.

• Mistakes by the Federal Reserve
• The Fed's Tight Fist
• Hoover's Propped-Up Prices

U.S. Protectionism

• The New Deal

New Deal Success and Failure

The impact of world war ii, the bottom line, the great depression: overview, causes, and effects.

• Depression in the Economy: Definition and Example
• Economic Collapse
• Business Cycle
• Boom And Bust Cycle
• Negative Growth
• What Was the Great Depression? CURRENT ARTICLE
• Were There Any Periods of Major Deflation in U.S. History?
• The Greatest Generation
• U.S. Government Financial Bailouts
• Austerity: When the Government Tightens Its Belt
• The Economic Effects of the New Deal
• Gold Reserve Act of 1934
• Emergency Banking Act of 1933

The Great Depression was a devastating and prolonged economic recession that followed the crash of the U.S. stock market in 1929. It lasted through 1941, the same year the United States entered World War II. The period was marked by several economic contractions, including the stock market crash of 1929 , banking panics that occurred in 1930 and 1931. and the Smoot-Hawley Tariff that crashed world trade. Other events and policies helped to prolong the Depression during the 1930s.

Economists and historians often cite the Great Depression as the largest if not the most catastrophic economic event of the 20th century.

What Caused the Great Depression?

It's hard to pinpoint exactly what caused the Great Depression but economists and historians generally agree that several mitigating factors led to this period of downturn. They include the stock market crash of 1929, the gold standard, a drop in lending and tariffs, banking panics, and contracted monetary policies by the Fed.

Key Takeaways

• The Great Depression was the greatest and longest economic recession in modern world history.
• The Depression ran from 1929 to 1941.
• Investing in the speculative market in the 1920s led to the stock market crash in 1929 and this wiped out a great deal of nominal wealth.
• Other factors also contributed to the Great Depression, including inactivity followed by overaction by the Fed.
• Presidents Hoover and Roosevelt both tried to mitigate the impact of the Depression through government policies.

Investopedia / Sabrina Jiang

The U.S. stock market fell by nearly 50% and corporate profits declined by over 90% during a short depression known as the Forgotten Depression that lasted from 1920 to 1921. The U.S. economy enjoyed robust growth during the rest of the decade. The American public discovered the stock market and dove in headfirst during the Roaring Twenties period.

Speculative frenzies affected both the real estate markets and the New York Stock Exchange (NYSE). Loose money supply and high levels of  margin trading  by investors helped fuel an unprecedented increase in asset prices.

The lead-up to October 1929 saw equity prices rise to all-time high multiples of more than 19-times after-tax corporate earnings. Coupled with the benchmark Dow Jones Industrial Index (DJIA) increasing 500% in just five years, this ultimately caused the stock market crash .

The NYSE bubble burst violently on Oct. 24, 1929, a day that has come to be known as Black Thursday . A brief rally occurred on Friday the 25th and during a half-day session on Saturday the 26th but the following week brought Black Monday (Oct. 28) and Black Tuesday (Oct. 29). The DJIA fell by more than 20% over those two days. The stock market would eventually fall almost 90% from its 1929 peak.

Ripples from the crash spread across the Atlantic Ocean to Europe, triggering other financial crises such as the collapse of the Boden-Kredit Anstalt, Austria’s most important bank. The economic calamity hit both continents in full force in 1931.

The 1929 stock market crash wiped out nominal wealth, both corporate and private, and this sent the U.S. economy into a tailspin. The U.S. unemployment rate was 3.2% in early 1929. It soared to over 25% by 1933.

The unemployment rate remained above 18.9% in 1938 despite unprecedented interventions and government spending by both the Hoover and Roosevelt administrations. Real per capita gross domestic product (GDP) was below 1929 levels by the time the Japanese bombed Pearl Harbor in late 1941.

The crash likely triggered the decade-long economic downturn but most historians and economists agree that it didn't cause the Great Depression by itself. Nor does it explain why the slump's depth and persistence were so severe. A variety of specific events and policies contributed to the Great Depression and helped to prolong it during the 1930s.

Mistakes by the Young Federal Reserve

The relatively new  Federal Reserve  mismanaged the supply of money and credit before and after the crash in 1929, according to monetarists such as  Milton Friedman  and acknowledged by former Federal Reserve Chair  Ben Bernanke .

The Fed was created in 1913 and it remained fairly inactive throughout the first eight years of its existence. Then it allowed significant  monetary expansion after the economy recovered from the 1920 to 1921 depression.

The total money supply grew by $28 billion, a 61.8% increase between 1921 and 1928. Bank deposits increased by 51.1%, savings and loan shares rose by 224.3%, and net life insurance policy reserves jumped by 113.8%. All this occurred after the Federal Reserve cut required reserves to 3% in 1917. Gains in gold reserves via the Treasury and Fed were only $1.16 billion.

The Fed instigated the rapid expansion that preceded the collapse by increasing the money supply and keeping the interest rate low during the decade. Much of the surplus money supply growth inflated the stock market and real estate bubbles.

The Fed took the opposite course by cutting the money supply by nearly a third after the bubbles burst and the market crashed. This reduction caused severe liquidity problems for many small banks and choked off hopes for a quick recovery.

Trade routes created during World War II remained open during the Great Depression and helped the market recover.

The Fed's Tight Fist

As Bernanke noted in a November 2002 address, bank panics were typically resolved within weeks before the Fed existed. Large private financial institutions would loan money to the strongest smaller institutions to maintain system integrity. That sort of scenario had occurred two decades earlier during the Panic of 1907 .

Investment banker J.P. Morgan stepped in to rally Wall Street denizens to move significant amounts of capital to banks that were lacking funds when frenzied selling sent the NYSE spiraling downward and led to a bank run. Ironically, it was that panic that led the government to create the Federal Reserve to cut its reliance on individual financiers such as Morgan.

The heads of several New York banks had tried to instill confidence after Black Thursday by prominently purchasing large blocks of blue-chip stocks at above-market prices. These actions caused a brief rally on Friday but the panicked sell-offs resumed on Monday. The stock market has grown beyond the ability of such individual efforts in the decades since 1907. Only the Fed was big enough to prop up the U.S. financial system.

The Fed failed to do so with a cash injection between 1929 and 1932. It watched the money supply collapse instead and let thousands of banks fail. This and a collapsing financial sector led to deflation and spurred the following depression. Banking laws at the time made it very difficult for institutions to grow and diversify enough to survive a massive withdrawal of deposits or a run on the bank .

The Fed's harsh reaction may have been the result of its fear that bailing out careless banks would encourage fiscal irresponsibility in the future. Some historians argue that the Fed created the conditions that caused the economy to overheat and that it then exacerbated an already dire economic situation.

Hoover's Propped-Up Prices

Herbert Hoover has often been characterized as a "do-nothing" president but he took action after the crash occurred. He implemented three major changes between 1930 and 1932:

• An increase in federal spending by 42% that engaged in massive public works programs such as the Reconstruction Finance Corporation (RFC)
• Taxes to pay for new programs
• A ban on immigration in 1930 to keep low-skilled workers from flooding the labor market

Hoover was mainly concerned that wages would be cut following the economic downturn. He reasoned that prices had to stay high to ensure high paychecks in all industries. Consumers would have to pay more to keep prices high.

But the public was burned badly in the crash, leaving many people without the resources to spend lavishly on goods and services. Nor could companies count on overseas trade because foreign nations weren't willing to buy overpriced American goods any more than Americans were.

Many of Hoover's other post-crash interventions and actions by Congress damaged the economy's ability to adjust and reallocate resources, including wage, labor, trade, and price controls.

This bleak reality forced Hoover to use legislation to prop up prices and wages by choking out cheaper foreign competition. He signed the Smoot-Hawley Tariff Act of 1930 into law following the tradition of protectionists and against the protests of more than a thousand of the nation's economists.

The act was initially intended to protect agriculture but it swelled into a multi-industry tariff , imposing huge duties on more than 880 foreign products. Nearly three dozen countries retaliated and imports fell from $7 billion in 1929 to just $2.5 billion in 1932. International trade declined by 66% by 1934. Not surprisingly, economic conditions worsened worldwide.

Hoover's desire to maintain jobs and individual and corporate income levels was understandable but he encouraged businesses to raise wages, avoid layoffs , and keep prices high at a time when they naturally should have fallen. The United States suffered one to three years of low wages and unemployment , including previous cycles of recession/depression, before dropping prices led to a recovery.

The U.S. economy deteriorated from a recession to a depression when it was unable to sustain these artificial levels with global trade effectively cut off.

President Franklin Roosevelt promised massive change when he was elected in 1933. The New Deal he initiated was an innovative, unprecedented series of domestic programs and acts that were designed to bolster American businesses, reduce unemployment, and protect the public.

The New Deal was loosely based on Keynesian economics and the idea that the government could and should stimulate the economy. It set lofty goals to create and maintain the national infrastructure , full employment, and healthy wages. The government set about achieving these through price, wage, and even production controls.

Some economists claim that Roosevelt continued many of Hoover's interventions, just on a larger scale. He kept a rigid focus on price supports and minimum wages and removed the country from the gold standard , forbidding individuals to hoard gold coins and bullion. He banned monopolistic business practices and instituted dozens of new public works programs and other job-creation agencies.

The Roosevelt administration also paid farmers and ranchers to stop or cut back on production. One of the most heartbreaking conundrums of the period was the destruction of excess crops despite the need for thousands of Americans to access affordable food.

Federal taxes tripled between 1933 and 1940 to pay for these initiatives as well as new programs such as Social Security . These increases included hikes in excise taxes, personal income taxes, inheritance taxes, corporate income taxes, and an excess profits tax.

The New Deal led to measurable results including financial system reform and stabilization and boosting public confidence. Roosevelt declared a bank holiday for an entire week in March 1933 to prevent institutional collapse due to panicked withdrawals . This was followed by a construction program for a network of dams, bridges, tunnels, and roads. These projects opened up federal work programs, employing thousands of people.

The economy showed some recovery but the rebound was far too weak for the New Deal's policies to be deemed successful in pulling America out of the Great Depression. Historians and economists disagree on the reason:

• Keynesians blame a lack of federal spending, saying that Roosevelt didn't go far enough in his government-centric recovery plans.
• Others claim that Roosevelt may have prolonged the Depression, just as Hoover did before him, by trying to spark immediate improvement instead of letting the economic/ business cycle follow its usual two-year course of hitting bottom and then rebounding.

A study by two economists at the University of California, Los Angeles estimated that the New Deal extended the Great Depression by at least seven years. But it's possible that the relatively quick recovery that was characteristic of other post-depression recoveries may not have occurred as rapidly post-1929 because it was the first time the general public and not just the Wall Street elite lost large amounts in the stock market.

American economic historian Robert Higgs argued that Roosevelt's new rules and regulations came so fast and were so revolutionary that businesses became afraid to hire or invest. Philip Harvey, a professor of law and economics at Rutgers University, suggested that Roosevelt was more interested in addressing social welfare concerns than in creating a Keynesian-style macroeconomic stimulus package .

Social Security policies enacted by the New Deal created programs for unemployment, disability insurance, old age, and widows' benefits.

The Great Depression appeared to end suddenly around 1941 to 1942 if we look at employment and GDP figures. This was the time when the United States entered World War II. The unemployment rate fell from eight million in 1940 to just over one million in 1943. However, more than 16 million Americans were conscripted to fight in the Armed Services. The real unemployment rate in the private sector grew during the war.

The standard of living declined due to wartime shortages caused by rationing and taxes rose dramatically to fund the war effort. Private investment dropped from $17.9 billion in 1940 to $5.7 billion in 1943 and total private-sector production fell by nearly 50%.

The notion that the war ended the Great Depression is a broken window fallacy but the conflict did put the United States on the road to recovery. The war opened international trading channels and reversed price and wage controls. Government demand opened up for inexpensive products and the demand created a massive fiscal stimulus.

Private investments rose from $10.6 billion to $30.6 billion in the first 12 months after the war ended. The stock market broke into a bull run in a few short years.

When Did the Great Depression Start?

The Great Depression began following the stock market crash of 1929 which wiped out both private and corporate nominal wealth. This sent the U.S. economy into a tailspin and eventually trickled out beyond the U.S. border to Europe.

When Did the Great Depression End?

The Great Depression ended in 1941 at around the same time the United States entered World War II. Most economists cite this as the end date because it was the time when unemployment dropped and GDP increased.

How Did the Great Depression End?

Conventional wisdom says that the U.S. was jolted out of the Great Depression by New Deal job creation combined with a flood of government investment in the private sector in preparation for the country's entrance into World War II. This is disputed by some economists who assert that the Depression would have ended earlier with less government intervention.

The Great Depression was the result of an unlucky combination of factors including a flip-flopping Fed, protectionist tariffs, and inconsistently applied government interventionist efforts. This period could have been shortened or even avoided by a change in any one of these factors.

The debate continues as to whether the interventions were appropriate but many of the reforms from the New Deal exist to this day. They include Social Security, unemployment insurance, and agricultural subsidies . The assumption that the federal government should act in times of national economic crisis has become strongly supported. This legacy is one of the reasons why the Great Depression is considered one of the seminal events in modern American history.

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History. " Here Are Warning Signs Investors Missed Before the 1929 Crash ."

Federal Reserve Bank of Minneapolis. " The 1929 Stock Market: Irving Fisher Was Right ." Pages 1-2.

McGrattan, Ellen R., and Edward C. Prescott. "The 1929 stock market: Irving Fisher was right."  International Economic Review, Vol. 45, No. 4, 2004, Pages 991-1009.

History. " Great Depression History ."

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The Federal Reserve Board. " Remarks by Governor Ben. S. Bernanke ."

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Sieroń, Arkadiusz. "Inflation and income inequality."  Prague Economic Papers, Vol. 26, No. 6, 2017, Pages 633-645.

Kenneth D. Garbade. " Birth of a Market: The US Treasury Securities Market from the Great War to the Great Depression." MIT Press, 2012.

The Federal Reserve History. " The Panic of 1907 ."

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Sautter, Udo. "Government and Unemployment: The Use of Public Works before the New Deal."  The Journal of American History, Vol . 73, No. 1, 1986, Pages 59-86.

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The National WWII Museum. " WWII Veteran Statistics ."

Skousen, Mark. "Saving the depression: A new look at world war II."  The Review of Austrian Economics, Vol. 2, No. 1, 1988, Pages 211-226.

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History Grade 11 - Topic 2 Essay Questions

Essay Question:

To what extent did Roosevelt’s New Deal succeed in mitigating the negative effects of the Great Depression in USA in the 1930’s?  Present an argument in support of your answer using relevant historical evidence. [1]

Introduction:

On 29 October 1929 (also known as “Black Tuesday”), the United States (US) stock market crashed which initiated the Great Depression. [2]   After winning the US elections and taking office in 1933, President Franklin D. Roosevelt sought to bring economic relief to the US during the 1930’s by implementing a series of reforms and restructures in what he called the ‘New Deal’. [3]   Although the ‘New Deal’ succeeded somewhat in relieving economic situations on a macro-level, the “New Deal”, in the long run, is considered a failure as it did not ultimately succeed in what it was set out to do, which was to recover the economy from its “depressed state”. [4]   This statement will be discussed by analyzing the two phases of the “New Deal”, as well as discussing the effects of some of the relief, recovery and reform programs implemented.

The First Hundred Days

When analyzing the legacy of the “New Deal”, it is important to understand that there were two phases of the deal, namely the “First New Deal” and the “Second New Deal”.  The First New Deal consisted mainly of the first three months of Roosevelt’s presidency and is referred to as the “hundred days”. [5]   Within the first hundred days, various relief programs such as the “Federal Emergency Relief Administration” (FRA), the “Civilian Conservation Corps” and the “Agricultural Adjustment Act” were implemented in order to create employment opportunities for Americans as well as providing some extent of economic relief for struggling citizens. [6]

Another significant program that was implemented during the hundred days, was the “National Industrial Recovery Act” (NIRA).  This recovery act allowed working Americans to unionize and in a sense bargain for better working conditions, as well as wages. [7]   Roosevelt felt that a significant part of the recovery process will come from decreasing competition through using set prices, wages and commodities. [8]   Mixed reviews came from the implementation of these recovery acts, as many felt that corporate heads were being disadvantaged by the state, and in some instance some corporations felt as though their competition became the US government itself. [9]   However, on the larger part, many felt that the hundred days and the “First New Deal” was relatively successful as it was marked by a decrease in unemployment and the stabilization of US banks.

The Second New Deal

In 1935, Roosevelt decided that the New Deal should take a more aggressive approach in the attempt to diminish the Great Depression. [10]   This phase is known as the Second New Deal.  One of the more prominent acts implemented was the “Social Security” Act which provided the elderly and widowed people with some financial support, allowed some unemployment and disability compensation and set a framework or minimum wages and maximum work hours. [11]   Furthermore, the “Works Progress Administration” (WPA) was implemented to provide the unemployed with opportunities in the public sector.  These opportunities included building bridges, schools and roads. [12]   To some extent, the Great Deal built a platform for more financial security and opportunity for the American citizens during the onslaught of the Great Depression with its housing, employment and financial interventions. [13]

Criticism of the New Deal

When analyzing some of the programs and acts implemented by the Great Deal, one also has to mention points of criticism.  One of the more popular points of criticism stems from the “interventionalist” and anti-competitive nature of the New Deal. [14]   Larger companies and the Supreme Court also felt that some of the reform initiatives were unconstitutional and did not go through the right channels to implement reform acts. [15]   However, with this criticism in mind, the main reason why the New Deal was deemed unsuccessful, is simply because it did not achieve what it set out to do.  The American economy and employment rates did not recover enough for the New Deal to have remedied the effects of the Great Depression.  Rather, American entrance into the Second World War stimulated more economic growth than the New Deal. [16]

Therefore, one could say that the New Deal mitigated the effects of the Great Depression to an extent where it improved the employment rate from 25% of 1933 to 17% in 1939. [17]   One could also say that some of the relief and reform acts were deemed successful as some of them, such as the Social Security Act, still remains today. [18]   The New Deal also led to a, albeit short-lived, coalition between “white working people, African Americans and left-wing intellectuals”. [19]   Many also argue that the New Deal built a surface for the future economy of America post-World War Two. [20]   However, with regards to the mitigation of the Great Depression itself, the New Deal ultimately did not succeed in ending the Great Depression and its effects.

This content was originally produced for the SAHO classroom by Sebastian Moronell, Ayabulela Ntwakumba, Simone van der Colff & Thandile Xesi.

[1] National Senior Certificate.: “Grade 11 November 2017 History Paper 1 Exam,” National Senior Certificate, November 2017.

[2] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[3] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[4] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[5] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[6] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[7] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[8] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[9] J. Green.: “The New Deal:  crash Course US History #34,” Crash Course [YouTube Online].  Accessed on 23 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=380s ).

[10] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[11] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[12] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[13] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, pp. 265-267.

[14] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[15] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[16] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[17] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[18] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[19] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[20] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, p. 267.

• Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online], January 2021.  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).
• Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ). 
• Green, J.: “The New Deal:  Crash Course US History #34,” Crash Course [online].  Accessed on 24 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=391s ).
• History.  Editors of History.: “New Deal,” History [online], November 2021.  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).
• Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online], January 2021.  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).
• Kennedy, D.M.: “What the New Deal Did,” Political Science Quarterly, (124),(2), 2009, pp. 251-268.

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The Great Depression Essay

The students learn about the events that led to the stock market crash, the concerns of the Depression, and the effects of the New Deal programs on the American people and the American economy. While reading and discussing these important issues in American History, the students choose an original Depression photograph [primary source] and create a story using historical facts. The project is one week in duration. A scoring guide and handout are utilized.

1. The student will conduct research using primary and secondary sources. 2. The student will write an essay using the provided format and criteria. 3. The student will present his/her work to class an an oral presentation.

Missouri Standards

Goal 1.2 Conduct research to answer questions and evaluate information and ideas. Goal 1.4 Use technological tools and other resources to locate, select, and organize information. Goal 2.1 Plan and make written, oral and visual presentations for a variety of purposes and audiences.

Kansas Standards

Benchmark 2: The student uses a working knowledge and understanding of individuals, groups, ideas, developments, and turning points in the era of the Great Depression through World War II in United States history (1930-1945).

The student:

1. (A) analyzes the causes and impact of the Great Depression (e.g., overproduction, consumer debt, banking regulation, unequal distribution of wealth).

2. (A) analyzes the costs and benefits of New Deal programs. (e.g., budget deficits vs. creating employment, expanding government: CCC, WPA, Social Security, TVA, community infrastructure improved, dependence on subsides).

3. (A) analyzes the debate over expansion of federal government programs during the Depression (e.g., Herbert Hoover, Franklin Delano Roosevelt, Alf Landon, Huey Long, Father Charles Coughlin).

Benchmark 3: The student writes technical text using the writing process.

1. Develops a technical text focused on one main purpose. (Ideas and Content: prewriting, drafting, revising: N,E,T,P)

2. Clearly defines the main idea with selection of concise, logical details that meet the reader’s informational needs. (Ideas and Content: prewriting, drafting, revising: N,E,T,P)

3. Analyzes and understands implications and consequences of plagiarism (e.g. ethical, legal, professional). (Ideas and Content: prewriting, drafting, revising: N,E,T,P)

4. Cites references for all sources of information and includes summarized and paraphrased ideas from other authors. (Ideas and Content: prewriting, drafting, revising: N,E,T,P)

5. Constructs a bibliography with a standard style of format (e.g. MLA, APA, etc.). (Ideas and Content: prewriting, drafting, revising: N,E,T,P)

6. Applies appropriate strategies to generate technical text (e.g. brainstorming, listing, webbing, working in pairs or cooperative groups, identifying information from print sources). (Organization:prewriting, drafting, revising: N,E,T,P)

7. Organizes information within each section, paragraph, list, or graphic in a logical and effective sequence to meet the reader’s informational needs. (Organization: prewriting, drafting, revising: N,E,T,P)

8. Composes a comprehensive piece with a constructive introduction, a relevant or sequential body, and a suitable conclusion. Organization: prewriting, drafting, revising: N,E,T,P)

9. Uses appropriate transitions to connect ideas within the piece (e.g. enumerated lists, bullets, headings, subheadings, complex outlining elements). (Organization: prewriting, drafting, revising: N,E,T,P

• http://www.infoplease.com/
• http://www.yahoo.com
• http://www.yahooligans.com
• Images in the Farm Security Administration-Office of War Information Collection (Library of Congress) America at the Crossroads - Great Photographs From the Thirties, Edited by Jerome Prescott, Smithmark, New York, 1995. American Odyssey, Gary Nash, Glencoe, New York, 1994. Highlights in American History, Grace Kachaturoff, Schaffer Publications, Torrance, California, 1995. Life During the Great Depression, Dennis Nishi, Lucent Books, San Diego, 1998.

The students will study the chapters on the Great Depression and Roosevelt’s New Deal using the school text American Odyssey. The class will read the text, complete guided readings, and study these issues while reading articles from Roosevelt’s Presidency and readings from Highlights in American History. The Depression Essay Project will be introduced during this unit. The use of primary sources and the need to access various Internet sources will enhance the learning process. Each student will choose a photograph from sources to include the KC Public Librarv Special Collection. The students can chose a photograph from the collections of Margaret Bourke-White or Dorothea Lange. Government archives have numerous photographs from the Depression. Additional historical information will be found by accessing Yahoo , Searchopolis , and Information Please Almanac. The students will gain additional knowledge about FDR by using the Project WhistleStop Web Site. After completing the research, the student will follow the format of the essay. The time frame will be distributed in order for the student to organize his/her time and information. A class period in the computer lab will be made available to the class. Each student will have the opportunity to share his/her insights in the form of an oral presentation.

DEPRESSION ESSAY

MAKE YOUR PHOTOGRAPH COME ALIVE!

In this project students will describe the life of a person or persons who suffered hardship and desperation during the Great Depression. The students will choose an authentic photograph from the Great Depression, which can be found using various resources. Students will describe the picture and give an identity to the person(s) in the picture and explain how the depression affected their life/lives. If a photograph is chosen without people, the students will create a person or family who lives [had lived] at the site. [The teacher will show several examples.] In addition, the student will explain how FDR’s New Deal helped restore, or did not restore, the lives of the individuals. A picture of the photograph must accompany the essay and its source documented. It is required that the students use proper mechanics and a five-paragraph essay format to tell this story. The format is as follows: Paragraph 1 This is a general paragraph that is interesting and captures the reader’s attention. Paragraph 2 This is the time to introduce the person [sl in the photo. Who is this? Where do/did they live? What was their life[s] like before the Depression? Paragraph 3 What was the Great Depression? Why did it occur? Explain how this person [s] was affected, and how the individual[s] came to be in the state as shown in the photograph. Paragraph 4 Explain what the New Deal was and how specific programs helped the person[s] in your photo. If there were negative aspects discuss and be specific. Paragraph 5 This is the conclusion of the essay. Describe what happened to the person[s] in the photograph. Describe lessons learned and/or how life[s] changed for this person[s].  

THIS IS THE TIME TO SHOW YOUR CREATIVE REPORTING TALENTS!

A scoring guide will be used to assess each student. The student will receive a copy of the scoring guide at the beginning of the project and a detailed explanation of the requirements of the project.

DEPRESSION ESSAY SCORING GUIDE

The Great Depression and the New Deal Phenomenon Essay

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The Great Depression was a phenomenon that did significant damage to the American economy. Before that, the economy grew on an unseen scale under President Hoover, but the growth was marked by excess and inequity, which eventually caused the Wall Street Crash. Hoover, clinging to the laissez-faire policy, was completely unable to alleviate the depression; on the contrary, F. D. Roosevelt introduced numerous steps (which became known as “the New Deal”) and provided significant governmental assistance to the population, which allowed the country to recover from the depression.

The Great Depression came to the USA in October 1929, with the bloated stock market crash known as the Wall Street Crash. In the preceding years, the U.S. had experienced a major growth in its economy under the President Herbert Hoover, a Republican.

However, the growth was extremely intense. While the level of life of an average American increased significantly, the owners of businesses, especially large ones, benefited the most. With time, due to the highly unequal distribution of income, as well as to the depression in farming regions, the buying capacity of Americans decreased significantly; this led to the inability to purchase the goods present in the market. It meant that companies could no longer sell their products; the products accumulated in the markets, unsold.

The businesses also could not hire employees or pay them salaries, so the unemployment rose. Everything “exploded” with the Wall Street Crash; tremendous amounts of money were withdrawn from the banks, and the latter were not able to collect debts from stagnating European banks. Numerous investors were wiped out of the market, and many businesses went bankrupt, while the surviving ones introduced layoffs and salary cuts, deepening the depression further (Foner 800).

President Hoover response to the Depression was controversial. He listened to his advisers who stated that crises were a normal part of capitalism (which they are), and that people should “tighten the belt” so that the unproductive firms die out and the moral virtue among the poor is born in large quantities (which is a doubtful point of view, though it apparently does follow from the logic of capitalism).

It was not realized by the government that the lower and middle classes constituted a crucial part of the people’s buying capacity, and that without the “less fortunate” being able to earn money, the depression would be only likely to worsen. Hoover strongly opposed any governmental aid to the needy, and continued hoping that the situation would solve on its own, as a result of voluntary steps of the business.

The Republican Congress under Hoover took a number of unsuccessful attempts to resolve the situation (in 1932 such as increasing taxes, which only further reduced the buying power of Americans); finally, in 1932, Hoover admitted that his politics had failed, and took some steps to help businesses, but not the unemployed (Foner 802-803).

On the other hand, when Roosevelt won the election in 1933, he took numerous steps which were almost opposite to what Hoover proposed. Before the elections, he offered the Americans “a new deal”; even though the notion was vague at the time, his policy became known under that name.

FDR significantly changed the relationship between businesses and the government, limited the actions of banks, and introduced significant governmental help to the population. In the first 100 days of his rule, Roosevelt adopted a large number of laws and established various national agencies aimed at addressing the crisis (Foner 812-813).

Among the acts adopted by the Congress under FDR, there were AAA (Agricultural Adjustment Act) and NIRA (National Industrial Recovery Act). AAA provided subsidies for farmers for not planting crops on a part of their territory, and for killing excess domesticated animals, which would defeat the excess of the farming products in the markets and increase their price.

NIRA established NRA (the National Recovery Administration) which was to set standards “for output, prices, and working conditions,” so that “‘cutthroat competition’… would be ended”; still, corporations turned NRA to their advantage, so it did little to help the situation (Foner 813-814).

The Federal Emergency Relief Administration (FERA) was an agency that provided states with finances to run relief programs and create jobs. In March 1933, CCC (the Civilian Conservation Corps) was created to employ young men in projects such as forest preservation or improvement of nature reserves, which allowed them to earn at least some wages from the government.

In November, the Civil Works Administration (CWA) was established to provide temporary jobs (such as construction of roads, tunnels, etc.) to larger numbers of unemployed people to help them survive the winter. CWA, however, became too costly to the government, and was dismissed in spring 1934 (Foner 813-815).

In 1934, FDR decreased governmental employment for the needy. In 1935, however, he restored his politics. The Works Progress Administration (WPA) was established; it provided jobs for nearly 3 million people who built bridges and buildings, organized art projects, etc.; WPA worked until 1943 and provided help to great numbers of people who were in the desperate need of a job (Foner 825).

To sum up, it should be stressed that the Great Depression came to the U.S. as a result of the highly unequal distribution of income, which meant that the population, the main purchasing power of the people, could buy not nearly enough products from the market, so the goods were left unsold, and the production stopped.

While the Hoover’s laissez-faire policy proved impotent in fighting the crisis, Roosevelt’s “New Deal,” which included numerous programs of social security, governmental jobs for the unemployed, etc., alleviated the situation and allowed the country to recover from the economic disaster.

Works Cited

Foner, Eric. Give Me Liberty!: An American History . Vol. 2. 4th ed. 2013. New York, NY: W. W. Norton & Company. Print.

• FDR Impacts on American Economy of New Deal
• FDR’s New Deal: Democratic Platform
• Leadership Styles: Democratic, Autocratic and Laissez-Faire
• American History From Reconstruction to World War I
• American Revolution: Reclaiming Rights and Powers
• Gilded Age and Progressive Era Freedom Challenges
• Women Status after the American Revolution
• American Revolution of 1774
• Chicago (A-D)
• Chicago (N-B)

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Essay On The Great Depression

Type of paper: Essay

Topic: United States , Business , Great Depression , Social Issues , Poverty , Banking , Money , Economics

Words: 1600

Published: 12/13/2019

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Introduction

Great Depression has been an unforgettable historical event that led the people of America to experience a big hole of nightmarish misery and poverty. It has been one of the most significant economic events that highlights the 20th century, as foretold by Graham, J. R. Banks had been closed, stock markets had been crashed that later inflicted the significant loss of people’s savings and money—their primary way of survival. From a single, big blow in the economy, a wide-range of variables were greatly affected, leading to a massive recession of economy that later arose into depression throughout the land. This single, big blow in the economy, which was the root cause of this tragic economic event, was actually the decline of the primary supplies of the people brought about by the war, thus later result to severe and complicated poverty in the country. An immeasurable and countless reasons had brought out this unsightly incident that no one could even imagine and dream about. Looking back through the history of Great Depression, following World War I, people experienced massive damages. According to Robert, J. (2012), it’s about an ‘American Story with global side effects’, such that America acts as the primary banker of the world during those times.

The Great Depression

Considering those times when prices are greatly increased during the war, Britain was heavily affected and weakened, thus having difficulty in stabilizing the economy of the World. Europe avoided to pay loans and to buy products from America. They couldn’t perform the task to keep their market open and available so those trades among countries can maintain a stable exchange rate. The trouble that lies in here is that there are so many countries that were no longer able to avail and afford the costly welfare expenses that they have (Robert, J., 2012). There were even cases where some nations had already over-borrowed resources, which is why those who had not yet experienced it avoid that same fate. This heavily affected the trade. There were imbalances. Improper and faulty strategic, economic ideas people had believed and trusted follows. Stock Market speculation was one of these, leading to stock market crash. People lost almost everything they have because of this. Most notable stock market crash is on 1929. The Dow Jones Industrial Average dropped almost 40 per cent (from 327 to 199) that spans from October 23 to November 13. This happened when everyone was igniting to own and have part of the stock market, but the matter is, they lack the money to be able to do so. So what they did was to borrow money, and bought tremendously overpriced stock, that in actuality, worth nothing at all. In the end they lost their money. But not only them! The people who they borrowed the money from also incurred a loss, since they we’re not being paid back. During those times debts had been written in amounts of fixed dollar, which is why deflation (falling prices, wages, profits) made it much harder for people like the farmers, the businessmen, and households to repay loans. American Farms were soon devastated financially. Farmers were not able to make any money from their crops and products. They were even losing more than $1.50 per acre of land they planted. According to Robert, J. (2009), from 1929 to 1933, the prices for wheat, corn, and other products from the farm plummeted to 54 per cent; and those for building materials even fell at 25 per cent. Considering that there were giant dust storms that added to the destruction of their fields, farmers were left with no choice but to lose their farms with no money at all. Increasing taxes also seemed to be of no significant effect in combatting the increasing debts of the people. In the study of Graham, J. R., they suggest that either changes nor regulations in tax policy that were designed to limit debt biases in the land, there were only but little effect on the usage and solvency of debt. When almost all the investors had been unable to pay their debts to the banks, the banks, in turn, lost all of its money as a consequence. Everyone came to retrieve and withdraw their cash from their respective banks. The problem is, the banks don’t have enough money available to entertain those withdrawals anymore. In the study conducted by Robert, J. (2012) he cited that Friedman and Schwartz claimed that it is the Federal Reserve failed to rescue and revive the banking system. From 1929 to 1933, almost 24,970 banks (more than two-fifths of the nations) disappeared because of failure or because of merger. The bank deposits and the circulation of currency, which are basically the money supply of the nation dropped by a third. What is ironical about it is that the very purpose why the congress was created is to backstop the banking system of the land in 1913. Economics is soon trickled down. Trickled-down economics comes from the idea that, as you give more money to the wealthy and rich people, more money would also be brought to the poor people, since rich people would establish a company that would hire those poor people and work for them. However, a bad turn of events happened, when what actually occurred is that, instead of hiring men, these wealthy proprietors and business men bought machines to do the work for them. Thus, this strategy was a big failure. There was also overproduction of supplies that happened, thanks to the companies which bought so many equipment to make things go faster and so that they could do mass production of goods. Now, instead of hiring laborers for the job, too many products had been made. Too many products became classified as surplus, since there are no enough people to buy all of the goods produced. Although they can already fast operations, it’s just that there were not enough people to consume their products, losing their hard-earned money in the process. All that they had spent for their products were put to waste. A seemingly domino-effect then had happened. Just from these things, dreadful effects followed as consequences: people became unemployed. From 1930 to 1939, the U.S. unemployment rate averaged 14 per cent; the peak rate, in 1932, was 23 per cent (Robert J, 2012). The longest period of unemployment in America was noted to last for 19 months as seen in the early 1980’s. Other places in the world also suffered from having the same fate—unemployment issues. Unemployment among industrial workers in United Kingdom had even reached up to 21 per a year earlier. In Germany, it even hit up to 44 per cent. As bad as how it looked, the Congress did not even consider federal unemployment insurance only until 1935 (Robert, J., 2012) As people became unemployed, massive poverty began to spread in the land. 34 million people, who has no source of income due to being unemployed, became really poor, that was almost more than 60% of people during those time that were officially considered and rendered as to living in poverty. Poverty led to homelessness. With no jobs and source of a living, almost two million people who basically have no home and walked almost everywhere looking for work. The towns start to put up signs signifying and telling these people to go away and don’t come near their place. These people with no home to live in are not only adults-- children were also a part of them. The great depression in America (started and dated in the late 1929) finally ended on the eve of World War II. The very reason it ended was the creation of new jobs needed for the building of weapons that the soldiers might need for their fights. At the end of World War II, the United States of America became the world’s most powerful country because of the creation of the nuclear missiles.

The Great Depression indeed was a living nightmare to all the people. But to think more about it, the great depression was actually a result and consequence of the greed and desire of people. A single war would turn out to be the destruction of the supplies; with which would later result to the inability of the country to maintain proper balance in trade and industry in economics. As foretold by Robert, J. (2012), “The Depression couldn't end until people changed their beliefs and behavior--a lengthy and tortuous process, because people cling to what's familiar”. Still giving off their pride and greed to bring things more fortunate in their way, they ended up being in poverty. Reckless ways of handling their situations, and continuing their belief to uphold the money that they initially think can help them rise from the ground, they eventually failed. Although fortunately, America was able to rise up, the key to all of it is to analyze things two steps ahead. People should start to think what the consequences of their actions should be.

Works Cited

Graham, J. R. et al (2011) Financial Distress in the Great Depression. Samuelson, R. J. et al (2012) Revisiting the Great Depression.

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