Library Of Congress
Library Of Congress

Public Domain Archive

Part of PICRYL.com. Not developed or endorsed by the Library of Congress

  • searchSearch
  • photo_albumStories
  • collectionsCollections
  • infoAbout
  • star_rateUpgrade
Truck trailers line up at a freight house to load and unload goods from the Chicago and Northwestern railroad, Chicago, Ill.

Truck trailers line up at a freight house to load and unload goods from the Chicago and Northwestern railroad, Chicago, Ill.

  • save_altThumbnail200x200
  • save_altSmall640x494
  • save_altMedium1024x791
  • save_altOriginal1024x791
description

Summary

At the end of the 1920s, the United States boasted the largest economy in the world. With the destruction wrought by World War I, Europeans struggled while Americans flourished. Upon succeeding to the Presidency, Herbert Hoover predicted that the United States would soon see the day when poverty was eliminated. Then, in a moment of triumph, the stock market crash of 1929 touched off a chain of events that plunged the United States into the longest, deepest economic crisis of its history. The Great Depression (1929-39) was the deepest and longest-lasting economic downturn in the history of the USA and the western industrialized world. It began after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors. Over the next several years, consumer spending and investment dropped, causing steep declines in industrial output and employment as failing companies laid off workers. By 1933, when the Great Depression reached its lowest point, some 15 million Americans were unemployed and nearly half the country’s banks had failed. The depression is best understood as the final chapter of the breakdown of the worldwide economic order. As the depression deepened, governments tried to protect their reserves of gold by keeping interest rates high and credit tight for too long. This had a devastating impact on credit, spending, and prices, and an ordinary business slump became a calamity. What ultimately ended the depression was World War II. Military spending and mobilization reduced the U.S. unemployment rate to 1.9 percent by 1943. It is too simplistic to view the stock market crash as the single cause of the Great Depression: - The gold standard. Most money was paper, but governments were obligated, if requested, to redeem that paper for gold. This "convertibility" put an upper limit on the volume of paper currency governments could print. A loss of gold (or convertible currencies) forced governments to raise interest rates. - The best-known economists Milton Friedman and Anna Schwartz, blame the Federal Reserve for permitting two-fifths of the nation's banks to fail between 1929 and 1933. Since deposits were not insured then, the bank failures wiped out savings and shrank the money supply. From 1929 to 1933 the money supply dropped by one-third, choking off credit and making it impossible for many individuals and businesses to spend or invest. - Economist Charles Kindleberger sees depression as a global event caused by a lack of world economic leadership. According to Kindleberger, Britain provided leadership before World War I. It fostered global trade by keeping its markets open, promoted expansion by making overseas investments, and prevented financial crises with emergency loans. Between WWI and WWII wars no country did enough to halt banking crises, and the entire industrial world adopted protectionist measures in attempts to curtail imports. In 1930, President Herbert Hoover signed the Smoot-Hawley tariff, raising tariffs on dutiable items by 52 percent. The protectionism put an extra brake on world trade just when countries should have been promoting it.

date_range

Date

01/01/1939
person

Contributors

Delano, Jack, photographer
place

Location

Melrose Park41.90059, -87.85673
Google Map of 41.9005865, -87.8567277
create

Source

Library of Congress
copyright

Copyright info

No known restrictions on publication.

Explorechicago and north western railway company

Explorefreight house

Exploremelrose park

Library Of Congress

The objects in this archive are from Library of Congress - the nation’s first established cultural institution and the largest library in the world, with millions of items including books, recordings, photographs, maps and manuscripts in its collections. The Library provides Congress, the federal government and the American people with a rich, diverse and enduring source of knowledge to inform, inspire and engage them and support their intellectual and creative endeavors.

Disclaimer: A work of the Library of Congress is "a work prepared by an officer or employee" of the federal government "as part of that person's official duties." In general, under section 105 of the Copyright Act, such works are not entitled to domestic copyright protection under U.S. law and are therefore in the public domain. This website is developed as a part of the world's largest public domain archive, PICRYL.com, and not developed or endorsed by the Library of Congress, https://www.picryl.com

Developed by GetArchive, 2015-2019