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Great Depression
During the Great Depression of the 1930s, millions of people lost their jobs, savings, and homes. The hard times lasted about ten years.
STOCK MARKET CRASH
The Great Depression began after the stock market crashed in October 1929. During the 1920s, many Americans had bought stocks—shares of ownership in companies. They hoped to make big profits, and they borrowed money to buy stocks.
When the stock market crashed, stocks lost their value. Some stocks became worthless. People who had put their money in the stock market lost most of it. They still owed the money they had borrowed to buy stocks. In just a few weeks, stocks lost $30 billion in value.
YEARS OF HARDSHIP
By 1933, the worst year of the Great Depression, about 15 million Americans were out of work. This was about one-fourth of the American workforce. People who had jobs had to work for less money.
People who were unemployed could not afford to buy goods (things for sale). So factories and mills that made goods shut down, and more people lost their jobs. The Great Depression grew worse.
People who had no jobs couldn’t pay their mortgages (loans to buy homes). They lost their homes. Homeless people slept in parks, under bridges, and in sewer pipes during the Great Depression.
BANK FAILURES
Many banks lost money when people could not repay bank loans. Some banks failed (went out of business). People who had put their money in those banks lost their savings. By 1933, about 5,000 banks had failed.
WHAT DID PRESIDENT HOOVER DO?
United States president Herbert Hoover did little to fight the Great Depression. He believed that the depression was a natural part of doing business. He thought it would end in a year or two.
At that time, the government didn’t help homeless and unemployed people. As the depression grew worse, many Americans blamed Hoover for not doing more to end it.
VOTERS CHOOSE A NEW DEAL
In 1932, Franklin D. Roosevelt won the election for president by a huge vote.
As soon as Roosevelt took office, he began sending new laws to Congress. The laws created many new government agencies. The agencies provided jobs for people. They also helped farmers, banks, and factories. Roosevelt called his programs to end the Great Depression the New Deal.
Roosevelt’s leadership during the Great Depression helped make him one of America’s most-loved presidents.
END OF THE DEPRESSION
World War II (1939-1945) ended the Great Depression. American factories began producing military supplies for countries that were at war with Germany and Japan. Millions of Americans went to work in the factories.
Source: Microsoft ® Encarta
