Great Depression

Great Depression, in U.S. history, the severe economic crisis generally considered to have been precipitated by the U.S. stock-market crash of 1929. Although it shared the basic characteristics of other such crises (see depression), the Great Depression was unprecedented in its length and in the wholesale poverty and tragedy it inflicted on society. Economists have disagreed over its causes, but certain causative factors are generally accepted. The prosperity of the 1920s was unevenly distributed among the various parts of the American economy—farmers and unskilled workers were notably excluded—with the result that the nation's productive capacity was greater than its capacity to consume. In addition, the tariff and war-debt policies of the Republican administrations of the 1920s had cut down the foreign market for American goods. Finally, easy-money policies led to an inordinate expansion of credit and installment buying and fantastic speculation in the stock market.

The American depression produced severe effects abroad, especially in Europe, where many countries had not fully recovered from the aftermath of World War I; in Germany, the economic disaster and resulting social dislocation contributed to the rise of Adolf Hitler. In the United States, at the depth (1932–33) of the depression, there were 16 million unemployed—about one third of the available labor force. The gross national product declined from the 1929 figure of $103,828,000,000 to $55,760,000,000 in 1933, and in two years more than 5,000 banks failed. As a social consequence of the depression, the birthrate fell precipitously, for the first time in American history falling below the replacement rate. The economic, agricultural, and relief policies of the New Deal administration under President Franklin Delano Roosevelt did a great deal to mitigate the effects of the depression and, most importantly, to restore a sense of confidence to the American people. Yet it is generally agreed that complete business recovery was not achieved and unemployment ended until the early 1940s, when as a result of World War II the government began to spend heavily for defense.

See R. R. and H. M. Lynd, Middletown in Transition (1937, repr. 1982); F. L. Allen, Since Yesterday: The 1930s in America (1940); D. Wecter, The Age of the Great Depression (1948, repr. 1956); A. M. Schlesinger, Jr., The Crisis of the Old Order (1957); D. A. Shannon, ed., The Great Depression (1960); C. Bird, The Invisible Scar: The Great Depression, and What It Did to American Life … (1966); A. U. Romasco, The Poverty of Abundance (1965); G. Rees, The Great Slump (1970); S. Terkel, Hard Times: An Oral History of the Great Depression (1970, repr. 2000); C. P. Kindleberger, The World in Depression (1973); G. H. Elder, Jr., Children of the Great Depression (1974, upd. ed. 1998); B. Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919–1939 (1996); D. M. Kennedy, Freedom from Fear (1999); T. H. Watkins, The Hungry Years (1999); L. Ahamed, Lords of Finance: The Bankers Who Broke the World (2009); M. Dickstein, Dancing in the Dark: A Cultural History of the Great Depression (2009); C. R. Morris, A Rabble of Dead Money (2017).

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