The Great Depression

The worst and longest economic crisis in the modern industrial world, the Great Depression in the United States had devastating consequences for American society. At its lowest depth (1932–33), more than 16 million people were unemployed, more than 5,000 banks had closed, and over 85,000 businesses had failed. Millions of Americans lost their jobs,rift gold their savings, and even their homes. The homeless built shacks for temporary shelter—these emerging shantytowns were nicknamed “Hoovervilles,” a bitter homage to President Herbert Hoover, who refused to give government assistance to the jobless. Farmers were hit especially hard. A severe drought coupled with the economic crisis ruined small farms throughout the Great Plains as productive farmland turned to dust and crop prices dropped by 50%. The effects of the American depression—severe unemployment rates and a sharp drop in the production and sales of goods—could also be felt abroad, where many European nations were still struggling to recover from World War I. Although the stock market crash of 1929 marked the onset of the depression, it was not the cause of it: deep underlying fissures already existed rift gold in the economy of America’s Roaring Twenties. For example, the tariff and war-debt policies after World War I contributed to the instability of the banking system. American banks made loans to European countries following World War I. However, the United States kept high tariffs on goods imported from other nations. These policies worked against one another: If other countries could not sell goods in the United States, they could not make enough money to pay back their loans or to buy American goods.