Causes• After World War I it began a new stage of optimism in the United States, followed by what it appeared to be an economical growth.• Americans discovered the benefits of the new industry techniques, taylorism and general electricity, but, the rural world stood on the outside of prosperity because farmers were in debt.• The stock market also participate of this optimism and soon increasing quotations end up on a bubble of speculation.
Key Facts: First years• The official beginning is October 29, 1929. The day the stock market crash “the black Tuesday”.• As stock prices plummeted with no hope of recovery, panic struck, masses of people tried to sell their stock but no one was buying.• Since many banks had also invested large portions of their clientsº savings in the stock market, these banks were force to close. People rush to banks that were still open to withdraw their money. This massive withdrawal of money caused additional banks to close.• Business and industry were both affected either by the Stock Market Crash o the bank closures, so, they cut back wages or lay off their workers.• In 1932 1 out of every 4 Americans was unemployed, farm income had fall, factories had shut down, banks had failed and business houses had closed their doors. Confidence evaporate since many had lost their life savings. In turn, Roosevelt crush the current president (Hoover) in the elections of 1932.
Key facts: The Dust Bowl• Years of poor agricultural practices and years of sustained drought cause the grass to disappear. With just topsoil exposed, high winds picked up the loose dirt and whirled it for miles.• The dust storms destroyed everything on their path, leaving farmers without their crops and since they were already in debt, borrowing money for seed and paying back when their crops came in not only farmers could not feed themselves, then they could not pay back their debt.• The simplest acts of life like breathing, eating, taking a walk, were no longer simple.• The Dust bowl helped to lengthen the Depression whose effects were felt world wide.
Key facts: The New Deal• President Roosevelt use three measures to recover economy: • The Agricultural Adjustment Act • National Industrial Recovery Act • Federal Emergency relief association• He also established a minimum salary, limit credit, reduce work hours, devalued dollar and fixed prices.
Recovery• The Great Depression ended with the advent of World War II. Government spending on the war caused or at least accelerated recovery from the great depression and it did helped reducing unemployment.