The year 1929 began a period of horror in America. It was the beginning of the Great Depression, a time during which many lost their jobs, became homeless, and went hungry.
Many people had to live off the nutrition of weeds. Some worked fifty-five hours and only earned seventy-five cents. The cause of the depression was the stock market crash of 1929, known to investors as Black Tuesday. Black Tuesday is said to be the most shocking financial event in the history of the United States. Not only did the stock market prices drop drastically, but the business world was brought down with it. Inflation also rose because of the crash.
The crash that occurred in October 1929 caused Americans to lose thirty billion dollars, and the value of the American dollar was 90% less than it was prior to the crash. Wholesale and retail food prices dropped 40%, and farm prices dropped over 60%. Approximately four million families were left unemployed and received only fifteen dollars a month in relief support. As a result of the crash, the government was required to set new regulations regarding stock market trading.
The reason for this was to attempt to prevent another stock market crash from happening in the future. The depression brought about many problems. Not only did people have to worry about unemployment, but they also had to worry about crime. Many Americans tried to get easy money by taking part in robberies, kidnappings, and murders. In 1935, criminals outnumbered carpenters four to one, grocers six to one, and doctors twenty to one.
In the Midwest, crooks with shotguns and Tommy Guns were a common thing. In large cities, criminals were making money off of extortion, prostitution, and auto theft.
Great Depression Timeline:
- 1929: Herbert Hoover became president. Stock market crash begins on October 24. Investors call October 29 Black Tuesday. Losses for the month are sixteen billion. Congress passes Agricultural Marketing Act to support farmers until they can get on their feet.
- 1930: By February, Federal Reserve cut prime interest rate 6% to 4%. The Smoot-Hawley Tariff passes on June 17. Democrats gain in congressional elections but still don’t have a majority. The GNP fails 9.4% and unemployment rate climbs 3.2% to 8.7%.
- 1931: A second banking panic occurs in the spring. The GNP falls another 8.5%. Unemployment rises to 15.9%.
- 1932: This year and next year are the worst of the depression. GNP falls a record 13.4%. Unemployment falls another 23.6%. Congress creates the Reconstruction Finance Corporation. Congress passes the Federal Home Loan Bank Act. Congress passes the Glass-Steagall Act of 1932.
- 1933: Roosevelt inaugurated. Third banking panic occurs. Congress passes the Emergency Banking Bill, the Farm Credit Act, and National Industrial Recovery Act.
- 1934: GNP rises 7.7%. Unemployment falls 21.7%.
- 1935: GNP rises 8.1%. Unemployment falls 20.1%.
- 1936: GNP rises 14.1%. Unemployment falls to 16.9%.
