While the United States was experiencing economic prosperity throughout the 1920s, it seemed like the good times were never going to end. However, the Wall Street Crash of 1929 unveiled many underlying problems that were hidden behind a decade of glitz and glamour. As the United States and the rest of the world entered the Depression era of the 1930s, it seemed like society had gone from one extreme to the other: from a booming economy and continual prosperity, to rising unemployment and bankrupt businesses.
This post takes you through the major events of the Great Depression, showing how America suddenly went from boom to bust. The Great Depression was a hard time for most Americans, affecting not just the United States but the rest of the world. The stock market lost almost 90% of its value in four years, unemployment reached 25% in 1933 and millions of people migrated from the Midwest in search of work. The American Dream was temporarily lost, and the future, for many, seemed pretty bleak.
The Not-So Roaring Twenties
While the Roaring Twenties gave the impression that the decade was enjoyed by all, unfortunately not everyone benefited from the societal changes.
- Farmers struggled to keep up with the changing decade. The modernism and advances in technology had brought new processes of farming to the nation, with the use of new machinery putting many farmers out of a job. The use of machinery also meant farmers were overproducing their crops and were unable to sell what they were producing, meaning they were missing out on a lot of money.
- Immigration laws and restrictions had made life very difficult for immigrants in America. Moving to America didn’t end up being what it seemed it would be, with immigrants having to live in crowded conditions and face discrimination from others.
- The KKK tormented the lives of African Americans, homosexuals, Jews and other minorities throughout the 1920s, provoking fear among their communities. The KKK’s resurgence in the decade meant they were getting more influential, and had more opportunities to target people they considered anti-American.
- While life in the Roaring Twenties looked extremely glamorous, 40% of Americans still lived in poverty throughout the decade. The rich and lavish lifestyle was mainly enjoyed by those who could afford it.
Great Depression Timeline
- 1929: The Wall Street Crash Sparks the Depression
- 1930: The Dust Bowls Begin
- 1931: Food Riots and Banks Collapse
- 1932: President Roosevelt is Elected
- 1933: The First Hundred Days and The New Deal
- 1934: Dust Storms and Droughts Continue
- 1935: Creation of the Works Progress Administration
- 1936: President Roosevelt Elected For a Second Term
- 1937: Spending on New Deal Programs Cut
- 1938: Economic Growth
- 1939: The Start of World War Two
- 1940: Defence Budget Increased
- 1941: United States Enters the War
March 4: Herbert Hoover assumes office as the President of the United States.
Hoover got a bad reputation as the Great Depression began, since his laissez-faire approach to economics didn’t help relieve the situation. In his belief, capitalism could prevent any major economic downturn through a free-market economy, therefore he didn’t want the economy to be well regulated. He assumed the crash and the depression would be over quickly, and that government interference was unnecessary.
August: This month, the prosperity achieved throughout the Roaring Twenties would reach its peak before beginning to downfall. This was as a result of numerous factors that came before the Wall Street Crash. When things started to look a bit bleak, the discount rate was increased from 5% to 6% by the Federal Reserve in order to support the gold standard and stop inflation.
September 3: After today, it would be 25 years before the stock market would reach its pre-Wall Street Crash high.
October 24: Black Thursday prompts the start of the stock market crash, which plunged the country and eventually the rest of the world into the depression. Immediately, the price of stocks drops by 11%, but with Wall Street bankers buying the stocks, only 2% was lost.
October 28: Stock prices fall by 13% today, making the day become known as Black Monday.
October 29: Black Tuesday hits the nation, with another 12% loss when 16 million shares are traded. The panic is worsened by the banks who decided to intervene this time.
November 23: Sideways trading begins when the stock market plummeted to the bottom. Unaware of the trouble coming, President Hoover states that:
“Any lack of confidence in the economic future or the basic strength of business in the United States is foolish.”
Unemployment Rate: 3.2% – unemployment had not been hit hard yet, since it would lag behind any effects of the stock market.
Herbert Hoover, 31st President of the United States
March: Since the Wall Street Crash, another 1.5 million people had been made unemployed. Despite this, President Hoover remains to be positive about the situation, claiming that:
“all the evidences indicate that the worst effects of the crash upon unemployment will have passed during the next sixty days.”
June 17: Taxes on 900 different imports are raised when President Hoover signs the Smoot-Hawley Tariff Act. Its aim was to support farmers, but hundreds of other goods ended up having tariffs imposed. This impacted international trade which began to fall, since other countries reacted to these tariffs. The tariff didn’t have a huge effect on the American economy, but caused many problems in Europe.
Around the same time, a drought hits 23 states across the US, affecting those from the mid-Atlantic region to the Mississippi River. This was the beginning of the Dust Bowls, which became characteristic of the 1930s farmers’ struggle. As well as a struggling economy, the land was unable to be used to grow crops, pushing many farmers out of their land. This is appropriately depicted in the novels by John Steinbeck, namely Of Mice and Men and The Grapes of Wrath.
The Dust Bowl would soon become the worst drought in 300 years, with Hoover originally asking the American Red Cross to support those in need. Later on, as things got worse, Congress provided $65 million for food boxes, seed and feed for farmers.
November 7: Causing failures in associated banks in the days that followed, the Bank of Tennessee fails. Weaknesses in the banking system were having an effect on the economy as it was slowly growing, ultimately bringing it back down again.
By the end of 1930, over 1,300 banks would fail as depositors hurried to withdraw their life savings. Since the banks only hold a small percentage of deposits, they can fail very quickly, especially with the amount of people asking for their money.
November: In New York City, apple-sellers crowd the streets as around 6,000 unemployed people begin selling apples at five cents each.
Unemployment Rate: 8.7% – the economy would shrink by 8.5% and prices fell by 6.4%, firmly allowing inflation to sink in.
The industrial production of the United States had fallen by half, and soup kitchens, bread lines and large numbers of homeless people became common in America’s cities.
Shanty towns erupted across the nation, known as “Hoovervilles,” named after the President whom many believed was incompetent, and reluctant, in dealing with the depression.
A dust bowl in Oklahoma, 1930s
February: In Minneapolis, food riots erupt as people struggle for food. A few hundred people smash the windows of a grocery market, taking bacon, ham and canned goods with them as they run away. A store owner pulled out a gun to stop the robbers, but ended up having his arm broken as he jumped up to defend. 100 policemen managed to bring the riots under control and 7 people were arrested as a result.
As unemployment continued, a lot of hatred towards foreign workers began to surface. Mexican Americans in Los Angeles were accused of stealing jobs from “true” Americans, and 6,024 were deported during this month.
Eight states in the South were the worst affected by the drought as it continued, creating the worst Arkansas would see in the 20th century. It was also at this time that the citizens of American would really begin to struggle with the worst effects of the depression.
December 11: The fourth largest bank in the United States, the Bank of the United States, fails, causing the biggest failure in a bank at the time. President Hoover then brought the top income tax rate up to 25% as he was concerned about budget deficits. When the bank collapsed, it had more than $200 million in deposits, which made it the largest bank failure in the history of the United States and was one of the most hard-hitting events during the Great Depression.
Unemployment Rate: 16.3%.
January: The Reconstruction Finance Corporation is created by Congress, which lends $2 billion to prevent further failures in financial institutions. It would be authorised to lend states money in July.
March: Since its peak in August 1929, the economy would reach rock bottom after a 27% shrink.
April: It’s reported that over 750,000 people in New York are on city relief, and 160,000 more are on a waiting list. On average, expenditures allowed for around $8.20 a month for those people getting relief.
June 6: President Hoover signs the Revenue Act of 1932, which increases the top income tax rate to 63%. Believing it would restore confidence and reduce the federal deficit, the taxes being pushed to a higher rate would actually make the depression worse.
July 2: Franklin D. Roosevelt, a 1932 presidential candidate, gives his “New Deal” speech to the public to reveal his plans for economic recovery.
November 8: In one of the key events in this Great Depression timeline, Democratic candidate Franklin D. Roosevelt is elected President of the United States after defeating Herbert Hoover in a landslide victory. Roosevelt got 22,800,000 popular votes, compared to Hoover who got 15,750,000.
Unemployment Rate: 23.6%.
March 4: President Roosevelt begins his “first hundred days” in office and 15 laws are introduced rapidly to begin tackling the Great Depression.
March 5: President Roosevelt closes all banks for a “bank holiday.”
March 9: Just five days after his inauguration, President Roosevelt creates the Emergency Banking Act, launching the New Deal. In order to prevent even more terrible failures, the act closed all banks in the United States. Throughout his time in office, Roosevelt would sign many more acts that would aid reform and recovery form the depression.
March 12: President Roosevelt begins his “Fireside Chats,” a series of broadcasts from his home where he would keep the country updated on the government’s attempts to combat the Great Depression. In the first Fireside Chat, Roosevelt talks the nation through the new bank laws he is introducing.
March 20: In an attempt to reduce government spending to help support the New Deal, the Government Economy Act is introduced.
March 22: Bringing the Prohibition era to an end, the Beer-Wine Revenue Act raises revenue by placing taxes on alcohol sales. Prohibition is officially repealed by the 21st amendment in December.
May: Many more acts are put in place, including the Federal Emergency Relief Act, the Agricultural Adjustment Act, the Emergency Farm Mortgage Act, and the Tennessee Valley Authority Act. These aim to create jobs, save farms and build power stations.
September 1: A Pension Plan is proposed by Dr. Francis Townsend, when he sends a letter to the Long Beach Press-Telegram. He suggested that pensions funded by the state for the elderly would be a good way to boost employment and consumption.
November 8: 4 million construction jobs are created by the Civil Works Administration.
Dust storms would hit Oklahoma and surrounding states, putting farmers in the area in a compromising position. In an attempt to reduce their supply and boost their prices, farmers would sacrifice their livestock, which was criticised by the public as a huge waste of food.
Unemployment Rate: 24.9%
The Breadline at the Franklin D. Roosevelt Memorial, representing those who hungrily waited in line for food during the Great Depression.
January 1: The Old Age Revolving Pensions Ltd. is officially incorporated by Dr. Francis Townsend
January 30: Gold price history is changed when the Gold Reserve Act is introduced. The act doubled the price of gold and banned private ownership.
February 1: The Share Our Wealth society is founded by Huey Long, which obtains the “excess fortunes” of the rich to give to the poor.
April 15: Known as Black Sunday, the worst dust storm hits the United States. In order to help farmers learn how to work sustainably, President Roosevelt introduces the Soil Conservation Act.
June 27: Federal mortgage insurance is provided by the Federal Housing Administration and the stock market becomes regulated by the Securities and Exchange Commission.
Americans also saw the hottest temperatures on record in 1934, and when the year came to an end, droughts had covered 75% of the nation.
Unemployment Rate: 21.7% – slightly lower than previous years. The economy also increased by 10.8%, responding to the New Deal programs put in place by President Roosevelt, and debt grew to $27 billion.
January 1: Support for the Townsend Plan grows, with more than 5,000 Townsend Clubs nationwide bringing together more than 2 million members. Even more, around 25 million Americans asked their representatives to support the plan in Washington by signing petitions.
February 1: There are 27,000 clubs in the Share Our Wealth society across the country, with 7.5 million Americans on the mailing list.
April 30: The Resettlement Administration helps to train and give loans to farmers.
May 6: The Works Progress Administration is created by the Emergency Relief Appropriation, hiring 8.5 million people to help with the unemployment crisis.
May 20: To help farms generate electricity, the Rural Electrification Act is implemented.
August: Income is provided to the elderly, blind and disabled thanks to the Social Security Act. They received their money from payroll taxes and the Social Security Trust Fund.
Unemployment Rate: 20.1%
June: The heat in the United States continued to blaze, with 8 states recording temperatures of 43 degrees celsius or warmer. Throughout the year, another 12 states recorded temperatures of the same level, including another four that reached 48 degrees.
November 3: President Roosevelt is elected to a second presidential term.
By the end of the year, the heat waves experienced across the nation had killed 1,693 people, and while trying to keep cool, 3,500 more people drowned.
Unemployment Rate: 16.9%
Migrant Mother by Dorethea Lange, 1936. The subject of the image is Florence Owens Thompson, a migrant mother pictured with her two children. This image became iconic of the Great Depression era.
This year, President Roosevelt had the difficult task of having to manage the debt, but also try to keep the economy out of the depression. In an attempt to relieve the country’s debt, he cut back spending on the New Deal programs, which ultimately pushed the economy back into the depression. In the end, after a $5 billion relief program was enacted by Congress, the economy grew by 5.1%.
Unemployment Rate: 14.3%
June: The economy started to grow again this year, eventually bringing the country out of the Great Depression. However, unemployment rates were still extremely high.
Unemployment Rate: 19.0%
In 1939, a Federal Security Agency is made to offer federal education funding, food, drug safety and Social Security, in order to help people try and get back on their feet.
April 14: John Steinbeck publishes his novel The Grapes of Wrath, depicting the hardships of the 1930s through a migrating family from Oklahoma.
November: With the invasion of Poland by Hitler and the start of the Second World War, President Roosevelt persuaded Congress to remove the military arms embargo to France and Britain to support them during the war.
From this year to 1941, when Pearl Harbour is attacked by the Japanese, manufacturing in the United States will have increased to 50%.
Unemployment Rate: 17.2%
June: As the war continued, the defence budget was increased by President Roosevelt, as well as the top income to 81%.
Unemployment Rate: 14.6%
December 7: When the United States enters the war following the Japanese attack on Pearl Harbour, the country is finally able to get out of the Great Depression by mobilising for war.
At the end of the Second World War, despite its devastating effects, the United States would emerge as the only economic superpower in the world.
President Roosevelt signing the declaration of war against Germany, 1941