In October of 1929, the New York Stock Exchange crashed causing hundreds of thousands of Americans to lose their money that was invested in stocks, ultimately leading to many companies filing for bankruptcy and millions of Americans losing their jobs. There were a combination of factors that led to the Great Depression. The years leading up to the Great Depression were full of patriotism and economic stability. The years leading up to the Great Depression were filled with consumerism and the trend such as, “two cars in every garage and owning the newest appliances.”1 Millions of Americans bought goods and products on a credit-based system. Hundreds of thousands of Americans invested in the stock market and local companies. Lastly, millions of Americans trusted the banks. They deposited all of their money into these banks with no guarantee of security. The banks themselves gave loans to many people who requested them; despite their credit history or their finances.
The Great Depression took away people’s comfort, security and hope. Millions of Americans were now unemployed, homeless, and lost all of their financial savings. Finding a job was rare and many men found wherever they could. By 1931, one out of four workers were unemployed, and those who did have a job could only find work part-time.2 Many Americans lost their savings as the banks continued to fail. That same year, banks with about $1.7 billion dollars in deposits were forced to close, with depositors losing majority of their money.3 Both cities and rural areas were affected heavily. One third of farmers lost their land and products and their income decreased by nearly fifty percent.4 Manufacturers and factory owners let go a large percentage of their employees, cutting down majority of their production, ultimately causing them to lose money. The Great Depression also affected families. The marriage and birth rate decreased significantly from 1930-1932.5 Many families sent their children to live with relatives in other parts of the country because they could not afford to feed them or supply them with heat and shelter.
Families looked to government relief to help them pay their bills and get through this period of instability. In 1933, President Franklin D. Roosevelt proposed and executed the New Deal which created new organizations designed to handle banks, farms and other areas that had failed.6 The implementation of the New Deal along with other reforms began to slowly turn the country and economy around. Historians and economists continue to name the Great Depression as one of the worst times for the American people.
- Dixon Wecter, The Age Of The Great Depression:1929-1941 (New York: The MacMillan Company, 1948).
- Robert F. Himmelberg, The Great Depression And The New Deal (Westport, Ct., Greenwood Ports, 2001), 9.
- Ibid., 10.
- Wecter, The Age of the Great Depression, 13.