US History

The Great Depression

The Great Depression was a time of great economic crisis during the 1930s. It began in
the United States, but quickly spread throughout much of the world. During this time,
many people were out of work, hungry, and homeless. In the city, people would stand in
long lines at soup kitchens to get a bite to eat. In the country, farmers struggled in the
Midwest where a great drought turned the soil into dust causing huge dust storms.

How did it start?

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The Great Depression began with the crash of the stock market in October of 1929.
Historians and economists give various causes for the Great Depression including
drought, overproduction of goods, bank failures, stock speculation, and consumer debt.

Change of Presidents

Herbert Hoover was President of the United States when the Great Depression began.
Many people blamed Hoover for the Great Depression. They even named the
shantytowns where homeless people lived "Hoovervilles" after him. In 1933, Franklin D.
Roosevelt was elected president. He promised the people of America a "New Deal."
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The New Deal

The New Deal was a series of laws, programs, and government agencies enacted to
help the country deal with the Great Depression. These laws placed regulations on the
stock market, banks, and businesses. They helped put people to work and tried to help
house and feed the poor. Many of these laws are still in place today like the Social
Security Act.

How did it end?

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The Great Depression ended with the start of World War II. The wartime economy put
many people back to work and filled factories to capacity.

Legacy

The Great Depression left a lasting legacy on the United States. The New Deal laws
significantly increased the role of the government in people's everyday lives. Also,
public works built up the infrastructure of the country with the construction of roads,
schools, bridges, parks, and airports.
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Interesting Facts About the Great Depression

 The stock market lost almost 90% of its value between 1929 and 1933.
 Around 11,000 banks failed during the Great Depression, leaving many with no
savings.
 In 1929, unemployment was around 3%. In 1933, it was 25%, with 1 out of every
4 people out of work.
 The average family income dropped by 40% during the Great Depression.
 More than $1 billion in bank deposits were lost due to bank closings.
 The New Deal created around 100 new government offices and 40 new
agencies.
 The worst years of the Great Depression were 1932 and 1933.
 Around 300,000 companies went out of business.
 Hundreds of thousands of families could not pay their mortgages and were
evicted from their homes.
 Millions of people migrated away from the Dust Bowl region in the Midwest.
Around 200,000 migrants moved to California.
 President Roosevelt pushed 15 major laws through in his "First Hundred Days" of
office.

The Great Depression

Causes
What caused the Great Depression?

There wasn't one event or a single factor that caused the Great Depression. It took a
number of conditions all happening at once to make the economy go so bad. We'll
take a look at some of the major factors below.

Stock Market Crash

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The start of the Great Depression is usually considered the Stock Market Crash of
1929. The market crashed from "over speculation." This is when stocks become worth a
lot more than the actual value of the company. People were buying stocks on credit
from the banks, but the rise in the market wasn't based on reality.

When the economy began to slow, stocks began to fall. In October of 1929, people
panicked and began selling stocks like crazy. The stock market crashed and many
people lost everything. Although the stock market crash wasn't the only cause for the
Great Depression, it certainly helped to get it started.

Farmers Struggle
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Farmers had been having a tough time for much of the 1920s before the Great
Depression started. With new machinery, farmers were growing more crops than ever
before. However, this caused prices to drop so low that they couldn't make any profit.

When the Great Depression hit, things got even worse for farmers. In the Midwest, a
drought started that would last until 1939. With no rainfall, the soil turned to dust. Many
farmers couldn't pay their bills and lost their farms. They migrated to California hoping to
find work.

People Borrowing Too Much

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In the 1920s, there were lots of new products available like automobiles, washing
machines, and radios. Advertising convinced people that everyone could afford these
items by borrowing money. As a result, many people went into debt buying products
they couldn't afford. When the economy went bad, many families couldn't make their
payments.

Too Many Goods

In the 1920s, the economy was booming. Companies built new factories and hired more
workers. Soon companies were making more products than they could sell. When the
Great Depression started, companies had to lay off workers and halt production. This
had a negative affect across the entire economy.
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Banks and Money

One of the major factors that led to the Great Depression was the failure of the banking
system. In the first few years of the Great Depression, over 10,000 banks failed. Many
people lost their life savings. Some people went from being rich to having nothing. The
U.S. government did little at the time to help the banks survive.
World Debt and Trade
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The entire world economy was struggling at the time of the Great Depression. The U.S.
had loaned billions of dollars to its allies recovering from World War I. As these
countries struggled, they could not pay back the U.S.

A new law called the Smoot-Hawley Tariff Act was passed in 1930. It placed high tariffs
(taxes) on imports. This hampered trade with other countries and helped to slow down
the economy.

Interesting Facts About the Causes of the Great Depression

 Economists still study (and argue) over exactly what caused the Great
Depression.
 In the 1920s, people began to buy goods using a type of credit called an
"installment plan." Prior to the 1920s, people rarely bought goods on credit.
 Many American banks and businesses were unregulated and used poor
business and accounting practices.
 Much of the wealth of the United States was concentrated in the hands of a few
people during the 1920s.

The Great Depression

End and Legacy
History >> The Great Depression

When did the Great Depression end?

The Great Depression didn't just end one day and everything was all better. The exact
date when the Great Depression ended is much debated by historians and economists.
Most people put the "start of the end" at the beginning of World War II in 1939.

What caused it to end?

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Even more debated is what caused the Great Depression to end. Most historians point
to World War II. When the war began, factories went back to full production building war
supplies such as tanks, airplanes, ships, guns, and ammunition. Unemployment
dropped as young men joined the army and people went to work in the factories. Other
people give credit to the New Deal programs of the 1930s for ending the depression.
No doubt, there were a lot of factors that helped to get the U.S. economy going again.
World War II, government regulations, a new banking system, and the end of the
drought in the Midwest all contributed to the recovery of the economy.

Legacy
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The Great Depression left a lasting legacy on the people and the government of the
United States. Many people who lived through the era distrusted banks and no longer
would buy goods using credit. They bought things with cash and stored emergency
rations in their basement. Other people felt that the depression made them and the
country stronger. It taught people about hard work and survival.

The New Deal

The many agencies and laws passed by the New Deal changed the country forever.
The New Deal changed the way people thought about the role of the government.
Perhaps the most important new law was the Social Security Act. This act (through a
payroll tax) provided retirement for the elderly, assistance to the disabled, and
unemployment insurance. It is still a major part of the government today.
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Other New Deal programs that impact our lives today include banking reform (like FDIC
insurance which keeps your money at the bank safe), stock market regulations (to keep
companies from lying about their profits), farm programs, housing programs, and laws
protecting and regulating unions.

Public Works

The works programs, such as the WPA, the PWA, and the CCC, did more than just
provide jobs to the unemployed, they left a lasting mark on the country. The WPA
(Works Progress Administration) alone built over 5,000 new schools, 1,000 libraries,
8,000 parks, over 650,000 miles of new roads, and built or repaired over 124,000
bridges. Many of these schools, parks, bridges, libraries, and roads are still used today.
This infrastructure helped the U.S. economy for decades to come.
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Interesting Facts About the End and Legacy of the Great Depression

 The CCC planted almost 3 billion trees throughout the country.

 The Fair Labor Standards Act gave us the forty-hour week, the minimum wage,
and established regulations on child labor.
 The WPA also installed over 16,000 miles of new water lines.
 In 1934, the FDIC began insuring up to $2,500 in bank deposits. Today the FDIC
insures up to $250,000 in deposits.
 Effects of the Great Depression
How This Low Point in American History Still Affects You
Today
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© The Balance, 2018

BY KIMBERLY AMADEO

Updated August 05, 2019

The Great Depression of 1929 devastated the U.S. economy. Half of all banks failed.
Unemployment rose to 25% and homelessness increased. Housing prices plummeted
30%, international trade collapsed by 65%, and prices fell 10% per year. It took 25
years for the stock market to recover.

But there were some beneficial effects. The New Deal programs installed safeguards to
make it less likely that the Depression could happen again.

01
Economy

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During the first five years of the depression, the economy shrank 50%. In 1929,
economic output was $105 billion, as measured by gross domestic product. That's the
equivalent of $1.057 trillion today.
The economy began shrinking in August 1929. By the end of the year, 650 banks had
failed. In 1930, the economy shrank another 8.5%, according to the Bureau of
Economic Analysis. GDP fell 6.4% in 1931 and 12.9% in 1932. By 1933, the country
had suffered at least four years of economic contraction. It only produced $57 billion,
half what it produced in 1929.

Part of the contraction was due to deflation. The Consumer Price Index fell 27%
between November 1929 to March 1933, according to the Bureau of Labor Statistics.
Falling prices sent many firms into bankruptcy. The BLS also reported that the
unemployment rate peaked at 24.9% in 1933.

New Deal spending boosted GDP growth by 10.8% in 1934. It grew another 8.9% in
1935, a whopping 12.9% in 1936, and 5.1% in 1937.

Unfortunately, the government cut back on New Deal spending in 1938. The depression
returned and the economy shrank 3.3%.

Preparations for World War II sent growth up 8% in 1939 and 8.8% in 1940. The next
year, Japan bombed Pearl Harbor, and the United States entered World War II.

The New Deal and spending for World War II shifted the economy from a pure free
market to a mixed economy. It depended much more on government spending for its
success. The timeline of the Great Depression shows this was a gradual, though
necessary, process.

02
Political

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The Depression affected politics by shaking confidence in unfettered capitalism. That

type of laissez-faire economics is what President Herbert Hoover advocated, and it had
failed.
As a result, people voted for Franklin Roosevelt. His Keynesian economics promised
that government spending would end the Depression. The New Deal worked. In 1934,
the economy grew 10.8% and unemployment declined.

But FDR became concerned about adding to the $5 trillion U.S. debt. He cut back
government spending in 1938, and the Depression resumed. No one wants to make
that mistake again. Politicians rely instead on deficit spending, tax cuts and other forms
of expansionary fiscal policy. That's created a dangerously high U.S. debt.

The Depression ended in 1939 as government spending ramped up for World War II.
That's led to the mistaken belief that military spending is good for the economy. But it
doesn't even rank as one of the four best real-world ways to create jobs

03
Social

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The Dust Bowl drought destroyed farming in the Midwest. It lasted 10 years, too long for
most farmers to hold out. To make things worse, prices for agricultural products
dropped to their lowest level since the Civil War. As farmers left in search of work, they
became homeless. Almost 6,000 shantytowns, called Hoovervilles, sprang up in the
1930s.

Wages for those who still had jobs fell 42%. Average family incomes dropped 40% from
$2,300 in 1929 to $1,500 in 1933. That's like having income fall from $32,181 to
$20,988 in 2016 dollars. As a result, the number of children sent to
orphanages increased by 50%. Roughly 250,000 older children left home to find work.

In 1933, Prohibition was repealed. That allowed the government to collect taxes on
sales of now-legal alcohol. FDR used the money to help pay for the New Deal.

The depression was so severe and lasted so long that many people thought it was
the end of the American Dream. Instead, it changed that dream to include a right to
material benefits. The American Dream as envisioned by the Founding Fathers
guaranteed the right to pursue one's own vision of happiness.

04
Unemployment

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In 1928, the final year of the Roaring Twenties, unemployment was 3.2%. That's less
than the natural rate of unemployment. By 1930, it had more than doubled to 8.7%. In
1931, it skyrocketed to 15.9% in 1931 and, in 1932, to 23.6%. By 1933, unemployment
was 24.9%. Almost 15 million people were out of work. That's highest unemployment
rate ever recorded in America.

New Deal programs helped reduce unemployment to 21.7% in 1934, 20.1% in 1935,
16.9% in 1936 and 14.3% in 1937. But less robust government spending in 1938 sent
unemployment back up to 19%. It remained above 10% until 1941, according to a
review of the unemployment rate by year.

05
Banking

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During the Depression, half of the nation's banks failed. In the first 10 months of 1930
alone, 744 failed. That was 1,000% more than the annual rate in the 1920s. By
1933, 4,000 banks had failed. As a result, depositors lost $140 billion.

People were stunned to find out that banks had used their deposits to invest in the stock
market. They rushed to take their money out before it was too late. These “runs” forced
even good banks out of business.
Fortunately, that rarely happens anymore. Depositors are protected by the Federal
Deposit Insurance Corporation. FDR created that program during the New Deal.

06
Stock Market

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The stock market lost 90% of its value between 1929 and 1932. It didn't recover for 25
years. People lost all confidence in Wall Street markets. Businesses, banks, and
individual investors were wiped out. Even people who hadn't invested lost money. Their
banks invested the money from their savings accounts.

07
Trade

Felix Koch/Cincinnati Museum Center/Getty Images

As countries' economies worsened, they erected trade barriers to protect local

industries. In 1930, Congress passed the Smoot-Hawley tariffs, hoping to protect
U.S. jobs.

Other countries retaliated. That created trading blocs based on national alliances and
trade currencies. World trade plummeted 65% as measured in dollars and 25% in the
total number of units. By 1939, it was still below its level in 1929. Here's world trade for
the first five years of the Depression:

 1929: $5.3 billion

 1930: $4.9 billion
 1931: $3.3 billion
 1932: $2.1 billion
 1933: $1.8 billion
 08
Deflation

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Prices fell 30% between 1930 and 1932. Deflation helped consumers, whose income
had fallen. It hurt farmers, businesses, and homeowners. Their mortgage payments
hadn't fallen 30%. As a result, many defaulted. They lost everything and became
migrants looking for work wherever they could find it.

Here are the price changes during the depression years:

 1929 0.6%
 1930 -6.4%
 1931 -9.3%
 1932 -10.3%
 1933 0.8%
 1934 1.5%
 1935 3.0%
 1936 1.4%
 1937 2.9%
 1938 -2.8%
 1939 0.0%
 1940 0.7%
 1941 9.9%

09
Long Term Impact

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The success of the New Deal made American expect that the government would save
them from any economic crises. During the Great Depression, people relied on
themselves and each other to pull through. The New Deal signaled that they could rely
on the federal government instead.

FDR modified the gold standard to protect the dollar's value. That set a precedent
for President Richard Nixon to end it completely in 1973.

The New Deal public works programs built many of today's landmarks. Iconic buildings
include the Chrysler building, Rockefeller Center and Dealey Plaza in Dallas. Bridges
include San Francisco's Golden Gate Bridge, New York's Triborough Bridge, and the
Florida Keys' Overseas Highway. Other Depression-era public works include La
Guardia Airport, the Lincoln Tunnel, and Hoover Dam. Also, three entire towns were
constructed: Greendale, Wisconsin; Greenhills, Ohio; and Greenbelt, Maryland.

American Revolution
Timeline
History >> American Revolution

Here are some key events and dates for the American Revolution and the war for
independence.

The Revolutionary War was between the Kingdom of Great Britain and the Thirteen American
colonies. The colonists did not like the way the British were treating them, especially when it
came to taxes. Eventually small arguments turned into larger fights and the colonists decided to
fight for their own country, independent of Britain.

Events that led up to the war:

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The Stamp Act (March 22, 1765) - Britain sets a tax that requires a stamp on all public
documents like newspapers or legal documents. The colonists did not like having this tax placed
on them. This led to unrest in the colonies and the Stamp Act Congress (October 1765).

The Boston Massacre (March 5, 1770 - 5 Boston colonists are shot by British troops.

The Destruction of Tea at Boston Harbor by Nathaniel Currier

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The Boston Tea Party (Dec. 16, 1773) - Angry with a new tax on tea, some Boston colonists
calling themselves the Sons of Liberty board British ships and dump crates of tea into the
Boston Harbor.

The First Continental Congress Meets (Sept. 1774) - Representatives from the colonies get
together to unite and oppose British taxes.
 Paul Revere's Midnight Ride
Source: National Archives and Records Administration.

The Revolutionary War Begins

Paul Revere's Ride (April 18, 1775) - The Revolutionary War starts and Paul Revere makes his
famous ride to warn the colonists that the "British are coming".

Battle of Lexington and Concord (April 19, 1775) - The actual fighting starts with the first "shot
heard around the world". The Americans win as the British retreat.

Capture of Fort Ticonderoga (May 10, 1775) - The Green Mountain Boys led by Ethan Allen
and Benedict Arnold capture Fort Ticonderoga from the British.
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Battle of Bunker Hill (June 16, 1775) - Major battle where William Prescott told the American
troops "don't fire until you see the whites of their eyes".
 Declaration of Independence by John Trumbull

The Declaration of Independence is Adopted (July 4, 1776) - The Continental Congress

agrees to Thomas Jefferson's Declaration of Independence.

George Washington Crosses the Delaware (Dec. 25, 1776) - George Washington and his
troops cross the Delaware River on Christmas night and surprise the enemy.

America Chooses a Flag (June 14, 1777) - The Continental Congress adopts the "Stars and
Stripes" Flag sewn by Betsy Ross.

Battles of Saratoga (September 19 - October 17, 1777) - British General John Burgoyne
surrenders his army to the Americans after suffering defeat at the Battles of Saratoga.

Valley Forge (Winter of 1777-1778) - The Continental army under George Washington spends
the winter training at Valley Forge.

Alliance with France (Feb. 16, 1778) - France recognized the United States as an independent
country with the Treaty of Alliance.
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Articles of Confederation (March 2, 1781)

 - Defined the official government of the
United States.

Battle of Yorktown (Oct. 19, 1781) - The

last major battle of the American
Revolutionary War. British General
Cornwallis' surrender at Yorktown was
the unofficial end to the war.

Treaty of Paris (Sept. 3, 1783) - Treaty t

The American Revolution

Causes
History >> American Revolution

The road leading up to the American Revolution didn't happen overnight. It took several years
and many events to push the colonists to a point where they wanted to fight for their
independence. Below are some of the key causes of the American Revolution in the order they
occurred.

The Founding of the Colonies

One thing to keep in mind is that many of the American colonies were first founded by people
trying to escape religious persecution in England. As the British government became more
involved in the affairs of colonies, people began to worry that they would once again lose their
freedoms.
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French and Indian War

The French and Indian War took place between the American colonies and New France. Both
sides allied with various Native American tribes. This war lasted from 1754 to 1763. British
troops not only helped the colonists to fight the war, but were stationed in the colonies for
protection after the war. These troops weren't free and Britain needed money to pay for the
troops. The British Parliament decided to tax the American colonies to help pay for the troops.

Plains 0f Abraham by Hervey Smyth

The British capture Quebec City during the French and Indian War
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Taxes, Laws, and More Taxes

Prior to 1764, the British government had pretty much left the colonists alone to govern
themselves. In 1764, they began to impose new laws and taxes. They implemented a number of
laws including the Sugar Act, Currency Act, Quartering Act, and the Stamp Act.

The colonists were not happy with the new taxes. They said they should not have to pay British
taxes because they had no representatives in the British Parliament. Their motto became "No
Taxation Without Representation."
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Protests in Boston

Many colonists began to protest against these new British taxes and laws. A group called the
Sons of Liberty formed in 1765 in Boston and soon spread throughout the colonies. During one
protest in Boston, a fight broke out and several colonists were shot and killed. This incident
became known as the Boston Massacre.

In 1773, the British imposed a new tax on tea. Several patriots in Boston protested this act by
boarding ships in Boston harbor and dumping their tea into the water. This protest became
known as the Boston Tea Party.
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 The Destruction of Tea at Boston Harbor by Nathaniel Currier
Intolerable Acts

The British decided that the colonies needed to be punished for the Boston Tea Party. They
issued a number of new laws that the colonists called the Intolerable Acts.

Boston Blockade
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One of the Intolerable Acts was the Boston Port Act which shut down the port of Boston for
trade. British ships blockaded Boston Harbor, punishing everyone who lived in Boston, both
patriots and loyalists. This angered not only people in Boston, but also people in other colonies
who were afraid the British would do the same thing to them.

Growing Unity Among the Colonies

The increased laws punishing the colonies did little to control the colonies as the British had
hoped, but actually had the opposite effect. The laws caused the colonies to become more
united against the British. Many colonies sent supplies to help Boston during the blockade. Also,
more and more colonists throughout the Americas joined up with the Sons of Liberty.
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First Continental Congress

In 1774, twelve of the thirteen colonies sent representatives to the First Continental Congress
as a direct response to the Intolerable Acts. They sent a petition to King George III to repeal the
Intolerable Acts. They never got a response. They also established a boycott of British goods.

The First Continental Congress, 1774 by Allyn Cox

The War Begins

In 1775, British soldiers in Massachusetts were ordered to disarm the American rebels and to
arrest their leaders. The Revolutionary War began on April 19,1775 when fighting broke out
between the two sides at the Battles of Lexington and Concord.