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Historical Facts About the Great Depression

The Great Depression was the worst economic depression in United States history. It started on October 29, 1929, a day known as Black Tuesday when the stock market crashed.

The Great Depression was the worst economic depression in United States history. It started on October 29, 1929, a day known as Black Tuesday when there was a stock market panic and the stock market crashed. This crashing of the stock market actually started the previous Thursday when market dropped 9%. Historians point to several factors that caused this crash. Looking back some of the comparisons to today are interesting. Businesses were making great profits in the 1920s while workers were not making very much while still buying merchandise on credit. Another historian writes that the crash came during a period in which real estate prices were declining which had peaked four years earlier.

The stock market (the Dow Jones Industrial Average) peaked at 381.17 on September 3, 1929 and then fell losing 17% in that month. Then climbed back up gaining about 8% of the losses back.

The first real downturn that started the crash of 1929 was on Thursday, October 24, 1929, a day that is known in history as Black Thursday. The following Monday the market fell 38 points which was almost 13%. The next day was Black Tuesday when the market fell another 30.5 points, almost 12 % drop with a record volume of 16 millions shares traded. That volume record was not broken until 1968.

The stock market actually recovered about 60% between November 1929 and April 1930. Then the market started a slide in April 1931 that continued until July 8, 1932 when the stock market bottomed at 41.32, an 89% decline from its peak. The 1929 stock market peak of 381 would not be seen again until 1954.

Ironically, 16 out of the top 20 one-day record percentage gains for the stock market were during the depression. On October 30, 1929, just two days after Black Tuesday, the market went up 28 points, which was 12.3%. And you thought the market has been volatile the past couple of years.

When you look at the above numbers and see the stock market fell 38 points in one day, some might think that isn’t so bad. It is the percentage that matters. As I write this, the Dow Jones Industrial Average is around 8000, if the market fell 89% in the next couple of years it would be at 800, a level not seen in the Dow since about 1982.

By 1932, 40% of the banks in the US had failed.

In 1932 the government announced a temporary halt by banks of home foreclosures.

Unemployment reaches its worst point in 1933 with the unemployment rate at 25.2%.

When people think of the great Depression and the US presidents, they usually think of Franklin D. Roosevelt (FDR). When the depression started and for the next three years, the president was Herbert Hoover and FDR wasn’t elected until the fall of 1932.

Shortly after his inauguration, President Roosevelt blamed “unscrupulous money lenders” and a “generation of self-seekers” for the economic problems.

Between 1929 and 1932 the average income of the average American family dropped by 40% from $2,300 to $1,500 per year.

During the depression of the 1930s the average wage of manufacturer was $17 per week, for a doctor the average wage was $61 per week.

By the end of 1930, some 3 million children were forced to quit school and at least 200,000 of them took to the roads on their own.

The government came up with programs to put Americans to work repairing and building. The Empire State building, the Chrysler building, the Golden Gate Bridge and Rockefeller Center were all built during the depression.

The depression changed clothing as well when the zipper became widely used because buttons became too expensive.

The circulation of money was low and the need for coins had diminished so much that the US mints did not even mint nickels in 1932 or 1933.

The number one song in 1932 was “Brother, Can You Spare a Dime?” by Bing Crosby which pretty much summed up the 1930s.

In 1933, congress passed the Home Owners Refinancing Act, which provided mortgage money and other aid to struggling homeowners. By the end of this program in 1936, it provided loans for almost one million mortgages.

Between 1935 and 1938, 800,000 people left their homes in Arkansas, Missouri, Texas and Oklahoma because of the depression and the severe drought that had ruined their land and lives. This severe drought was known as The Dust Bowl.

At the time of the depression, the US and the world was on a gold standard, which meant that the US dollar was backed by gold, the government would redeem money for gold, at that time gold was $20 per ounce.

Many believe that it was the start of World War II in 1941 that ended the great Depression, others say that isn’t true and that the economy was starting to rebound in 1938 before the US entered the war. It could still be true that the war helped since World War II started in September 1939 when Germany invaded Poland and the US went into production to manufacture many items the British were going to need soon.

© 2009 Sam Montana

Sources:

Lone Star College Kingwood, TX library

Thepeoplehistory.com

The Worst Hard Time by Timothy Egan

Large photo essay of the Great Depression

The Facts of World War II in Europe

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Comments (53)
Ranked #2 in History

Thank you Clairsie. As far as foreclosures, Fannie Mae, Freddie Mac and many of the large banks did halt foreclosures and then the February 2009 foreclosure figure came out 6% higher than the January foreclosure numbers. I am thinking it might just take a little time to show up in the numbers. We will see in April. Today as in the 1930s, I do think it is about regaining confidence in our system and more jobs. The jobs have to pay a decent wage though, a wage people can live on.

Great research in this article. In the early 80's (which were a highly inflationary time), I spent a lot of time talking to my parents and aunt and uncle about their experiences during the Great Depression. My mom graduated from high school in 1932 and they got married in 1935. I just might turn that into an article! Thanks for the great info.

And - that 40% downturn in wages is pretty much where we are now, if not a higher percentage now. There's great talk that we have a better employment rate here in Texas but the wages are terrible. Most people I know who get a job these days are working for half what they made previously.

Ranked #2 in History

Listening to senior citizens is something we should do more. Especially from the Great Depression era, and I think a lot of people today are wishing they had taken advice from those same people. My dad also graduated from high school not only in the Great Depression but also in the Dust Bowl. This job market today is the worst I have ever seen or at least comparable to the mid 1970s. I have seen some industries just stop hiring for well over a year now. A bad trend I am seeing now is how big companies are using temp services to hire people. Very low wages and no benefits and zero job security. That is also how some big companies win contracts. They hire out the hiring and payroll to these other services and then you get very low wages and no benefits. Wages are terrible.

A really well writen article. The fun supported facts were neat to read. I enjoyed this artical an all its wealth of information. I look forward to reading often from this Author.

Ranked #52 in History

A great book about the Depression is The Forgotten Man by Amity Shlaes.

Ranked #8 in History

This is really interesting actually. I'm investigating a site in Florida right now that has not been touched since the depression era. Well done.

Ranked #2 in History

Lauren, the Great Depression and that time period are certainly interesting. If you write an article about that site in Florida, I will be interesting in reading it.

Sounds like a bummer.

missie

the great depression must of been a real tradigy

missie

im also investagating a site in florida

Ranked #2 in History

It was an economic tragedy and hopefully our politicians learned from it, but maybe they didnt.

What a great history, thanks for sharing...

kayla

ur website helped me find good facts for a project thax :D

carrol hardy

considering that i am in high school this article was a grandiose help for the research i am doing on the education system of america in the 1930's. it's really sad that all those students were forced to quit school to take on the responsibilties that we all are pretty slow at doing now. thanks for listening.

GREAT ARTICLE.

Rebekah

thanks 4 all the help! i really needed a great website that gives a lot of facts about the great depression 4 my project! thanks again!! :D

bob backwards

it helps alot on home work. thanks. dechenla is right sam does write

alot. bye now!!!!! :P

your mom

um, i think that i'm gonna write an article onthe florida site. i'm kinda into that stuff. i love how sam is soooooooo smart.

bye

What terrible times these were. Well written piece of sad history within our nations desperate moment. Great write and read.

Ranked #60 in History

This freaks me out, hope it never happens again, but we can never be sure, history tends to repeat itself despite efforts to prevent the mistakes of our forefathers.

Ranked #2 in History

Amy, that is why learning about history is so important. History can repeat itself when people and politicians start forgetting what happened in the past. There are a number of similarities between the current economic problems that started in about 2008 and the Great Depression. I think bankers and politicians started to think that they were smarter than the past and it couldn’t happen again, and it almost did.

Ranked #60 in History

I couldn't agree more, Sam! I read certain historical event lessons and I sometimes just shake my head lol.

interesting read

Jerry McBride

You guys ever heard of the "Roaring Twenties" or "The Jazz Age"? Fact is, people, every day blue collar workers, were make a fantastic living back then. It was a decadent time, everyone had money to burn. There were new things to buy and boy did they... And lot them invested in wall street..

The collapse of 1929, was solely a financial problem with wall street. Too much put on the margins... You couldn't do now what they did then. In fact, so much so, that when a ripple went through the stock market, it turned into a tidal wave.

Painting the crash of 1929 with this line, "Businesses were making great profits in the 1920s while workers were not making very much while still buying merchandise on credit" simply isn't accurate.

Both my parents grew up through that era and they both spoke about those times from experience. Times were very good after the war, up until the crash. They had cars that they owned, a house paid for and both sets of grand parents owned their farms and all that goes with it.

You need to put down your sources ad go speak with the people that lived during those times. They were a very different time in American lie. Some thing we'll never see again.

Jerry

Jerry

Ranked #2 in History

Times were good in the roaring 20s, but not everyone was enjoying a living wage. It sounds like your family and those you talked to did make a good living during the 1920s and were not caught off guard when the Great Depression started. With the stock market booming, everyone was talking about stocks and everyone was buying stocks. And many people were buying stocks on margin, highly leveraged margin. Some stocks were actually bought with 90% margin. With the wheat boom during and after WWII, many farmers were buying more land and more equipment on credit. Speculation and overleveraging were rampant in the 1920s. When agriculture prices dropped and then the Great Depression, too many people could not pay off their loans, either the loans for the stocks they bought on margin or the farm equipment. I am certain many people had a great time and did own their homes and farms. After the 1929 market crash, home/farm foreclosures reached all time highs. And I have talked to many people who lived through the Great Depression, some of my close friends, my dad and other relatives all lived through the Great Depression and the Dust Bowl. As for never seeing that time again, according to some economist, we almost had another Great Depression starting in 2008. Another fact: By 1929, 1% of the Americans controlled 40% of the wealth, wages did not go higher during the good times of the 1920s for many people. More than 60% of Americans were living below the poverty level during the 1920s. http://www.thegreatdepressioncauses.com/causes.html

Ranked #2 in History

Jerry, thinking about the people I knew who lived through the Great Depression, none of them were homeless or had to go to soup lines. But the numbers and statistics do not lie and it was a very bad time. And a lot like today’s economic problems, a lot was brought on by buying too much on credit and overleveraging.

Nick Antinozzi

Sam, thank you for this great piece of writing. Time will tell if we're going to experience another similar era, and there is no greater truth than looking to the past to avoid mistakes in the future. Roosevelt's quote blaming unscrupulous money lenders and a generation of self seekers for the economic problems, certainly rings true today.

On the flipside, as bad as things are, what we are going through these days doesn't hold a candle to what our grandparents experienced during the Great Depression. Informative articles, such as yours, offer the reader the basic facts to draw comparisons. Obviously, things could be a lot worse.

Good job,

Nick

natalie newton

this page has got a lot of information for peoples homework and can make more people know more things about the great depression but the most shocking thing is that the goverment thought that the women are taking all of the mens jobs that is just sexist

biebergirl

THIS WAS SO SAD THE PIC WITH THE LITTLE KIDS WAS THE WORST PART BUT THIS HELPED ME ALOT THANKZ?

Jamesia Kindred

very accurate, and helpful!!!! THANKS ALOT!

gaby s

this was a really good artical for me to do my homework

Very detailed writing Sam and as always...accurate.

Lily James David

Thank You Very Much Most Of The Info Will Be Handy for my report On the 1930's Great Depression I'm sure to get a A+ on my paper wish me luck!!!

Your Truly,

(LJD)P.S. what caused the stock market to

crash???????

Ranked #2 in History

Thank you Beverly. Lily, the stock market crashed basically because too many had bought stocks on credit, meaning they borrowed money to buy stocks. When the stocks went down more and more and there was a panic and stocks continued down. Something very similar happened in 2008 when the so-called Great Recession started, this time it was houses people bought on credit with money they didn't have and couldn't pay.

crystle porter

heyy im doing a research on the great depression and this helpds ALOT!!so...heres to the owner of this site

THANKYOU!!!!!:)

baumz

helped me on my project but it was really boring

Ranked #79 in History

EXCELLENT!

Very impressive article. Thank you.

I had to come back to this article...I remember my Dad saying that from the day he landed in New York in 1923 until the day he retired from Air Canada in 1965, he never had more than 1 week unemployment and that meant right through the Depression. He said he was never out of work but of course, he wasn't blind to what was happening elsewhere. Great article Sam.

BieberSis!!!!!! <3

so sad this happened little children have to stand out side to tell people to give my dad a job??????

I remember learning about this at school, many years ago, but had forgotten a lot of details. Great write up, really enjoyed it.

Very nice article. Good information.

Toni

This is scary. I believe alot of us are in the great depression but no one wants to admit it. Get ready people this is going to happen. No doubt just read this article.

The blame game was then during the depression too. Thank you for a great article with lots of educational information.

This is excellent.

dylan green

Wonderful info it really helped me in what i needed to do. THANKS!

js2552

that is so sad

joesph

woooooooow

Ranked #162 in History

nice article and good research. To answer one of the questions of why the stock market crashed in 29 was because of margin buying. Buyers of stocks then were able to buy 100% ownership of stock with only 10%-20% down. This was fine when stocks were going up, but when they crashed, the buyers could not come up with the balance and the whole system crashed. Now, at least 80% and in most cases 100% of the total is required by law, preventing that from happening again.

meig

i feel real bad about these poor kids. They starve to death while a rich man's children are having a life that they will never have. Lirfe is not fair but cant they have a normal life of their own?....if i could turn back time i will try my best to help those who in needs......because i have too much money!!!!!!.......

meig

i would love to say thanks to the person that created this page because its a very helpful page for students like me.

well researched

As I know it was really complicated time for the whole America but it was passed away!

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