The American Guide Series: American Culture Defined: The Great Depression
The Great Depression
The Great Depression was an economic downturn that occurred worldwide from 1929 to 1939. The prosperity of the 1920s, sparked unsustainable speculation in the stock market, resulting in the stock market crash of 1929. From September to November 1929, stocks depreciated in value by 33%. This would be the first blow to the global economy in the Great Depression, and the instigating event that would accelerate the economic decline of the 1930s.
The stock market crash incited fear among the American public with many households becoming increasingly frugal, further stagnating the economy. Decreasing consumerism prevented the effective sale of manufactured goods. Manufacturing companies slowed their production, decreasing potential wages for workers. This led to the banking panics of the 1930s, in which Americans who had lost faith in the economic system, feared the banks’ ability to repay their depositors and rapidly withdrew their funds from banking institutions as a result. Unable to keep up with the withdrawals, 20% of United States banks were forced to close between 1930 and 1933.
In addition to the difficulties faced by financial institutions during the Great Depression, the Great Plains in North America experienced a significant drought in 1934. This drought allowed fierce windstorms to carry away the valuable topsoil that contained many of the necessary nutrients for crops. The subsequent crop failures caused 2.5 million Americans to migrate west in search of better livelihoods, many finding their way to California. The Great Plains, what was once the breadbasket of America, was now the Dust Bowl.