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The Great Depression Began 85 Years Ago Today

by Kent Masterson - The Oregon Herald Wednesday October 29, 2014    9:54 AM

The Great Depression was a worldwide economic depression in the decade before World War II. In most countries the Great Depression began after the stock market crash in the U.S., and lasted until the late 1930s or middle 1940s. It was the longest, deepest, and most widespread depression in American history.

The Great Depression had devastating effects in many countries as personal income, tax revenue, profits and prices dropped, while unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.

Construction came to a halt in many countries and farming and rural areas suffered as crop prices fell by about 60% and areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most.. Although it shared the basic characteristics of other such crises (see depression), the Great Depression was unprecedented in its length and in the wholesale poverty and tragedy it inflicted on society. Economists have disagreed over its causes, but certain causative factors are generally accepted. The prosperity of the 1920s was unevenly distributed among the various parts of the American economy—farmers and unskilled workers were notably excluded—with the result that the nation's productive capacity was greater than its capacity to consume. In addition, the tariff and war-debt policies of the Republican administrations of the 1920s had cut down the foreign market for American goods. Finally, easy-money policies led to an inordinate expansion of credit and installment buying and fantastic speculation in the stock market.

The American depression produced severe effects abroad, especially in Europe, where many countries had not fully recovered from the aftermath of World War I; in Germany, the economic disaster and resulting social dislocation contributed to the rise of Adolf Hitler. In the United States, at the depth (1932–33) of the depression, there were 16 million unemployed—about one third of the available labor force. The gross national product declined from the 1929 figure of $103,828,000,000 to $55,760,000,000 in 1933, and in two years more than 5,000 banks failed. As a social consequence of the depression, the birthrate fell precipitously, for the first time in American history falling below the replacement rate. The economic, agricultural, and relief policies of the New Deal administration under President Franklin Delano Roosevelt did a great deal to mitigate the effects of the depression and, most importantly, to restore a sense of confidence to the American people. Yet it is generally agreed that complete business recovery was not achieved and unemployment ended until the early 1940s, when as a result of World War II the government began to spend heavily for defense.

See R. R. and H. M. Lynd, Middletown in Transition (1937, repr. 1982); F. L. Allen, Since Yesterday: The 1930s in America (1940); D. Wecter, The Age of the Great Depression (1948, repr. 1956); A. M. Schlesinger, Jr., The Crisis of the Old Order (1957); D. A. Shannon, ed., The Great Depression (1960); C. Bird, The Invisible Scar: The Great Depression, and What It Did to American Life?… (1966); A. U. Romasco, The Poverty of Abundance (1965); G. Rees, The Great Slump (1970); S. Terkel, Hard Times: An Oral History of the Great Depression (1970, repr. 2000); C. P. Kindleberger, The World in Depression (1973); G. H. Elder, Jr., Children of the Great Depression (1974, upd. ed. 1998); D. M. Kennedy, Freedom from Fear (1999); T. H. Watkins, The Hungry Years (1999); L. Ahamed, Lords of Finance: The Bankers Who Broke the World (2009); M. Dickstein, Dancing in the Dark: A Cultural History of the Great Depression (2009).

Photo: Dorothea Lange's Migrant Mother depicts destitute pea pickers in California, centering on Florence Owens Thompson, age 32, a mother of seven children, in Nipomo, California, March 1936.
Photo 2: Crowd gathering at the intersection of Wall Street and Broad Street after the 1929 crash.
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