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What Caused the Great Depression?

Throughout the 1920s, the U.S. economy expanded rapidly, and the nation's total wealth more than doubled between 1920 and 1929, a period dubbed " the Roaring Twenties."

The stock market, centered at the New York Stock Exchange on Wall Street in New York City, was the scene of reckless speculation, where everyone from millionaire tycoons to cooks and janitors poured their savings into stocks. As a result, the stock market underwent rapid expansion, reaching its peak in August 1929.

By then, production had already declined and unemployment had risen, leaving stock prices much higher than their actual value. Additionally, wages at that time were low, consumer debt was proliferating, the agricultural sector of the economy was struggling due to drought and falling food prices and banks had an excess of large loans that could not be liquidated.

The American economy entered a mild recession during the summer of 1929, as consumer spending slowed and unsold goods began to pile up, which in turn slowed factory production. Nonetheless, stock prices continued to rise, and by the fall of that year had reached stratospheric levels that could not be justified by expected future earnings.

Stock Market Crash of 1929

On October 24, 1929, as nervous investors began selling overpriced shares en masse, the stock market crash that some had feared happened at last. A record 12.9 million shares were traded that day, known as "Black Thursday."

Five days later, on October 29, or "Black Tuesday," some 16 million shares were traded after another wave of panic swept Wall Street. Millions of shares ended up worthless, and those investors who had bought stocks "on margin" (with borrowed money) were wiped out completely.

As consumer confidence vanished in the wake of the stock market crash, the downturn in spending and investment led factories and other businesses to slow down production and begin firing their workers. For those who were lucky enough to remain employed, wages fell and buying power decreased.

Many Americans forced to buy on credit fell into debt, and the number of foreclosures and repossessions climbed steadily. The global adherence to the gold standard, which joined countries around the world in fixed currency exchange, helped spread economic woes from the United States throughout the world, especially in Europe.

Bank Runs and the Hoover Administration

Despite assurances from President Herbert Hoover and other leaders that the crisis would run its course, matters continued to get worse over the next three years. By 1930, 4 million Americans looking for work could not find it; that number had risen to 6 million in 1931.

Meanwhile, the country's industrial production had dropped by half. Bread lines, soup kitchens and rising numbers of homeless people became more and more common in America's towns and cities. Farmers couldn't afford to harvest their crops and were forced to leave them rotting in the fields while people elsewhere starved. In 1930, severe droughts in the Southern Plains brought high winds and dust from Texas to Nebraska, killing people, livestock and crops. The " Dust Bowl " inspired a mass migration of people from farmland to cities in search of work.

In the fall of 1930, the first of four waves of banking panics began, as large numbers of investors lost confidence in the solvency of their banks and demanded deposits in cash, forcing banks to liquidate loans in order to supplement their insufficient cash reserves on hand.

Bank runs swept the United States again in the spring and fall of 1931 and the fall of 1932, and by early 1933 thousands of banks had closed their doors.

In the face of this dire situation, Hoover's administration tried supporting failing banks and other institutions with government loans; the idea was that the banks in turn would loan to businesses, which would be able to hire back their employees.

FDR and the Great Depression

Hoover, a Republican who had formerly served as U.S. secretary of commerce, believed that government should not directly intervene in the economy and that it did not have the responsibility to create jobs or provide economic relief for its citizens.

In 1932, however, with the country mired in the depths of the Great Depression and some 15 million people unemployed, Democrat Franklin D. Roosevelt won an overwhelming victory in the presidential election.

By Inauguration Day (March 4, 1933), every U.S. state had ordered all remaining banks to close at the end of the fourth wave of banking panics, and the U.S. Treasury didn't have enough cash to pay all government workers. Nonetheless, FDR (as he was known) projected a calm energy and optimism, famously declaring "the only thing we have to fear is fear itself."

Roosevelt took immediate action to address the country's economic woes, first announcing a four-day "bank holiday" during which all banks would close so that Congress could pass reform legislation and reopen those banks determined to be sound. He also began addressing the public directly over the radio in a series of talks, and these so-called " fireside chats " went a long way toward restoring public confidence.

During Roosevelt's first 100 days in office, his administration passed legislation that aimed to stabilize industrial and agricultural production, create jobs and stimulate recovery.

In addition, Roosevelt sought to reform the financial system, creating the Federal Deposit Insurance Corporation ( FDIC) to protect depositors' accounts and the Securities and Exchange Commission (SEC) to regulate the stock market and prevent abuses of the kind that led to the 1929 crash.

The New Deal: A Road to Recovery

Among the programs and institutions of the New Deal that aided in recovery from the Great Depression was the Tennessee Valley Authority (TVA), which built dams and hydroelectric projects to control flooding and provide electric power to the impoverished Tennessee Valley region, and the Works Progress Administration (WPA), a permanent jobs program that employed 8.5 million people from 1935 to 1943.

When the Great Depression began, the United States was the only industrialized country in the world without some form of unemployment insurance or social security. In 1935, Congress passed the Social Security Act, which for the first time provided Americans with unemployment, disability and pensions for old age.

After showing early signs of recovery beginning in the spring of 1933, the economy continued to improve throughout the next three years, during which real GDP (adjusted for inflation) grew at an average rate of 9 percent per year.

A sharp recession hit in 1937, caused in part by the Federal Reserve's decision to increase its requirements for money in reserve. Though the economy began improving again in 1938, this second severe contraction reversed many of the gains in production and employment and prolonged the effects of the Great Depression through the end of the decade.

Depression-era hardships fueled the rise of extremist political movements in various European countries, most notably that of Adolf Hitler's Nazi regime in Germany. German aggression led war to break out in Europe in 1939, and the WPA turned its attention to strengthening the military infrastructure of the United States, even as the country maintained its neutrality.

African Americans in the Great Depression

One-fifth of all Americans receiving federal relief during the Great Depression were Black, most in the rural South. But farm and domestic work, two major sectors in which Black workers were employed, were not included in the 1935 Social Security Act, meaning there was no safety net in times of uncertainty. Rather than fire domestic help, private employers could simply pay them less without legal repercussions. And those relief programs for which African Americans were eligible on paper were rife with discrimination in practice since all relief programs were administered locally.

Despite these obstacles, Roosevelt's "Black Cabinet," led by Mary McLeod Bethune, ensured nearly every New Deal agency had a Black advisor. The number of African Americans working in government tripled.

Women in the Great Depression

There was one group of Americans who actually gained jobs during the Great Depression: Women. From 1930 to 1940, the number of employed women in the United States rose 24 percent from 10.5 million to 13 million Though they'd been steadily entering the workforce for decades, the financial pressures of the Great Depression drove women to seek employment in ever greater numbers as male breadwinners lost their jobs. The 22 percent decline in marriage rates between 1929 and 1939 also created an increase in single women in search of employment.

Women during the Great Depression had a strong advocate in First Lady Eleanor Roosevelt, who lobbied her husband for more women in office-like Secretary of Labor Frances Perkins, the first woman to ever hold a cabinet position.

Jobs available to women paid less but were more stable during the banking crisis: nursing, teaching and domestic work. They were supplanted by an increase in secretarial roles in FDR's rapidly-expanding government. But there was a catch: over 25 percent of the National Recovery Administration's wage codes set lower wages for women, and jobs created under the WPA confined women to fields like sewing and nursing that paid less than roles reserved for men.

Married women faced an additional hurdle: By 1940, 26 states had placed restrictions known as marriage bars on their employment, as working wives were perceived as taking away jobs from able-bodied men-even if, in practice, they were occupying jobs men would not want and doing them for far less pay.

Great Depression Ends and World War II Begins

With Roosevelt's decision to support Britain and France in the struggle against Germany and the other Axis Powers, defense manufacturing geared up, producing more and more private-sector jobs.

The Japanese attack on Pearl Harbor in December 1941 led to America's entry into World War II, and the nation's factories went back into full production mode.

This expanding industrial production, as well as widespread conscription beginning in 1942, reduced the unemployment rate to below its pre-Depression level. The Great Depression had ended at last, and the United States turned its attention to the global conflict of World War II.

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HISTORY Vault

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Great Depression: Black Thursday, Facts & Effects

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The Great Depression was the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1939. At its peak, the U.S. unemployment rate topped 20 percent.

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The Great Depression: Crash Course US History #33

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a period, throughout the 1930s, when waves of severe drought and dust storms in the North American prairies occurred, having devastating consequences for the residents, livestock, and agriculture there: When the Dust Bowl began, the Great Depression was already underway-it was one disaster on top of another.

the region that suffered from these waves of drought and dust storms, including the entire U.S. Midwest and, in Canada, the southern prairies of Alberta and Saskatchewan: Our Oklahoma panhandle was smack dab in the center of that heartless Dust Bowl.

any similar dry region elsewhere: Where we see the tragic formation of dust bowls in Asia and Africa, overgrazing is believed to be the main culprit.

QUIZ YOURSELF ON "ITS" VS. "IT'S"!

Apostrophes can be tricky; prove you know the difference between "it's" and "its" in this crafty quiz!

On the farm, the feed for chicks is significantly different from the roosters'; ______ not even comparable.

Dictionary.com Unabridged Based on the Random House Unabridged Dictionary, © Random House, Inc. 2022

How to use Dust Bowl in a sentence

Finally, in a virtually extinct Dust Bowl drawl, he started talking.

It mostly sprang up during the Great Depression because of Dust Bowl refugees heading west.

Judith Baca's vivid murals grace a freeway underpass and a flood control channel, where they convey vital California stories like those of Dust Bowl migrants, the Zoot Suit Riots, and the first Olympic women's marathon.

British Dictionary definitions for Dust Bowl (1 of 2)

a semiarid area in which the surface soil is exposed to wind erosion and dust storms occur

British Dictionary definitions for Dust Bowl (2 of 2)

the Dust Bowl the area of the south central US that became denuded of topsoil by wind erosion during the droughts of the mid-1930s

Collins English Dictionary - Complete & Unabridged 2012 Digital Edition © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009, 2012

Cultural definitions for Dust Bowl

A parched region of the Great Plains, including parts of Oklahoma, Arkansas, and Texas, where a combination of drought and soil erosion created enormous dust storms in the 1930s. The novel The Grapes of Wrath, by John Steinbeck, describes the plight of the "Okies" and "Arkies" uprooted by the drought and forced to migrate to California.

The New Dictionary of Cultural Literacy, Third Edition Copyright © 2005 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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Definition of Dust Bowl | Dictionary.com

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Dust bowl definition, a period, throughout the 1930s, when waves of severe drought and dust storms in the North American prairies occurred, having devastating consequences for the residents, livestock, and agriculture there: When the Dust Bowl began, the Great Depression was already underway-it was one disaster on top of another.

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Migrant-worker definition, migrating, especially of people; migratory. See more.

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Video SparkNotes: John Steinbeck's Of Mice and Men summary

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of mice and men: literary & historical context - videos & lessons | study.com

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Of Mice and Men: Literary & Historical Context - Videos & Lessons | Study.com

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The Literary and Historical Context chapter of this Of Mice and Men: Study Guide course is the most efficient way to study the history of the book...

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"Farming and the Dust Bowl During the Great Depression:

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"Farming and the Dust Bowl During the Great Depression:

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Newsela | Farming and the Dust Bowl During the Great Depression

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The U.S. government took action to help farms during the Great Depression.

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Agriculture and Migrant Workers

During Steinbeck's childhood, an agricultural shift was taking place in California. In the 1800s, large ranches and grain farms dominated the state's economy. More specialty farms later developed that cultivated fruit crops such as oranges and grapes. This shift was enabled by the increased use of irrigation, which transformed many desert areas into productive cropland. By 1929 irrigated land made up about 16 percent of the farmland in California. Irrigation provided the water fruit farms required. From 1879 to 1928, the value of fruit farm production rose from 4 percent of the total agricultural output to about 80 percent.

Besides needing a lot of water, fruit farms required more laborers than California could provide through its native-born residents. To solve this problem, landowners hired immigrants from Mexico and Asia and migrants from other states. As the fruit farms increased in size and number, the demand for these workers increased. Thus, when Steinbeck was attending college during the early 1920s, he was able to easily drop out and get work as a bindlestiff. These migrants worked on both fruit farms and grain ranches, such as the one depicted in Of Mice and Men. They usually completed the grain harvest by early July and did not start the grape harvest until September.

While doing this work, Steinbeck came into contact with many of society's outsiders, including Mexicans, African Americans, and the physically and mentally disabled. Talking about Of Mice and Men, Steinbeck stated, "I worked in the same country. ... The characters are composites. ... Lennie was a real person."

When the Great Depression hit in 1929, millions of Americans found themselves out of work, a problem that was compounded by the Dust Bowl. This 10-year drought struck lands already harmed by bad farming practices, devastating large areas of Oklahoma, New Mexico, and a number of other states. As a result, thousands of tenant farmers were forced off their land. To find work, many of them migrated to California to work on fruit farms and ranches. As Steinbeck was writing Of Mice and Men in the mid-1930s, California was being overrun with migrant workers. Most of them faced harsh working conditions, which is suggested in Of Mice and Men and more fully developed in The Grapes of Wrath.

Literary Connections

Steinbeck was partially motivated to write Of Mice and Men because of the success of his novel Tortilla Flat. Before the publication of this novel, Steinbeck and his wife, Carol, lived in obscurity in poor conditions in a cottage. Although he published several works before Tortilla Flat, none of them achieved any popularity. This lack of success had a benefit for the author. Because he didn't have much money, Steinbeck acted and dressed as other poverty-stricken people did, which gave him a connection and insight into the lives of the poor. With the success of Tortilla Flat, however, Steinbeck began to earn much more money, a development that allowed him to improve his and Carol's living conditions. Although the extra income was welcome, Steinbeck feared he might lose touch with the poor workers he depicted in his novels.

Tortilla Flat garnered Steinbeck widespread critical praise for his writing. The author worried this praise would alter his perspective. He feared that he might start to write in a way that was "important," rather than truthful. To counteract this tendency, Steinbeck decided to write a humble children's story. "I want to re-create a child's world," he said, planning to feature sensations, such as colors and tastes, that are more clear to children than they are to adults. The result was Of Mice and Men, the title of which comes from the 18th-century Scottish poet Robert Burns's poem "To a Mouse." Although this work developed into an adult novel instead of a children's story, it still retains some of Steinbeck's original intentions. His description of the pond, for example, is vivid and sensual: "A stilted heron labored up into the air and pounded down river." Of Mice and Men, therefore, was an attempt by Steinbeck to remain humble.

From Page to Stage to Film

Steinbeck's attempt to preserve his attitude as an obscure writer resulted in the author being thrusted even further into the public eye. Because of the popularity of Of Mice and Men, John Steinbeck became a household name.

Soon the playwright-director George Kaufman wanted to adapt Of Mice and Men into a theatrical play, which would differ greatly from the staged production Steinbeck supported in San Francisco. The latter production was almost identical to the novel, using exactly the same dialogue. Kaufman, however, wanted to shape the story into a Broadway production, which would involve changing dialogue and actions as needed. Eventually Steinbeck agreed and worked with Kaufman to adapt the novel. Steinbeck soon felt out of his element and allowed Kaufman to take more control of the project. The play Of Mice and Men opened to rave reviews on Broadway in 1937 and won the New York Drama Critics' Circle Award for best play for 1937-1938. As a result, Steinbeck became an even more popular author.

Hollywood soon made a strong push for a film adaptation of the work. The producer-director Lewis Milestone bought the film rights and gained creative control of the movie. The result was a highly regarded film starring Burgess Meredith as George and Lon Chaney Jr. as Lennie. The film adaptation, also titled Of Mice and Men, opened in theaters in 1939 and received four Oscar nominations.

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During Steinbeck's childhood, an agricultural shift was taking place in California. In the 1800s, large ranches and grain farms dominated the state's economy. More specialty farms later developed that cultivated fruit crops such as oranges and grapes. This shift was enabled by the increased use of irrigation, which transformed many desert areas into productive cropland.

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Of Mice and Men Historical Context Video

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Of Mice and Men Historical Context Video

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Of Mice and Men  | Context | John Steinbeck

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Wordwall - Create better lessons quicker

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Who are the main characters? - George Milton and Lennie Small , Who wrote the novel? - John Steinbeck, What is the novel's full title? - Of Mice and Men, How does the novel begin? - George and Lennie sleep by the pool for the night before going to the ranch., Where is the novel set? - California, USA, When was the novel written? - in the 1930s, Which scene do you think is most popular? - The scene when Lennie crushes Curley's hand., Three words to describe Lennie would be... - child-like, strong, huge, Three words to describe George would be ... - small, quick-tempered, thoughtful, Three words to describe Crooks would be... - submissive, black, lonely, Three words to describe Curley's wife would be... - lonely, flirty, unhappy, Three words to describe Curley would be... - short, boxer, mean, Three words to describe Candy would be... - old, dog-lover, worried,

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Of Mice and Men by John Steinbeck - starter game

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Who are the main characters? - George Milton and Lennie Small , Who wrote the novel? - John Steinbeck, What is the novel's full title? - Of Mice and Men, How does the novel begin? - George and Lennie sleep by the pool for the night before going to the ranch., Where is the novel set?