The Great Depression was a period of severe economic crisis in American history. It began in 1929 when the stock market crashed and continued until 1939. During this period, thousands of banks were closed, hundreds of thousands of people lost the ownership of their homes and millions had to migrate from their homes.
It is called the Great Depression because although it started in USA, it led to a worldwide economic crisis. And this was the worst economic crisis in the history of the modern world. In USA, it was the longest and hardest economic crisis throughout American history.
After the World War I ended in 1918, USA witnessed a period of great prosperity and wealth. People in USA started spending a lot on consumer products and they started buying a lot on credit. The stock market witnessed a lot of speculation. This period was called the ‘Roaring Twenties’. Then the stock market crashed in 1929. This was the beginning of the Great Depression. As the stock market crashed, this caused a panic and people started withdrawing money from banks.
During the Great Depression, thousands of banks and countless businesses failed. In all, it is estimated that 11,000 banks failed in the Great Depression. And nearly 300,000 companies also failed during this time. The stock market also suffered greatly and lost nearly 90% of its value.
Millions of people had to migrate during the Great Depression and moved from their homes to other place in search for jobs and foods. But jobs were also very scarce during the Great Depression and nearly 25% of the population had no work to do. A lot of people also lost their homes because they couldn’t pay mortgages and were evicted.
The period of Great Depression started during the Presidency of Herbert Hoover. Although Hoover was not to be blamed for the economic crisis, he couldn’t offer any effective solutions to end the economic crisis. This made him quite unpopular and after his term ended, people elected Franklin D. Roosevelt into the office.
Roosevelt played an important role in minimizing the impact of the economic crisis. During his first hundred days as the President, Roosevelt passed 15 major laws. He undertook a large-scale effort to help the common people, regulate the stock market better and offered more social security to the population. His reforms, programs and laws came to be known as the ‘New Deal’. Due to his efforts, Roosevelt was elected four times as the President, the only person to have been the President for so many times.
Although Roosevelt’s ‘New Deal’ greatly improved the economy, it didn’t end the Great Depression. In 1939, the World War II broke out. A huge number of American soldiers got involved in the war and the wartime economy finally brought the Great Depression to an end.