The Great Depression

Bank run, about 1933

Courtesy of Franklin D. Roosevelt Presidential Library and Museum

Americans had lived with painful business cycles throughout their history, but the Great Depression was unprecedented in breadth, depth, and duration. Optimistic after World War I, firms over-invested in factories. Farmers over-invested in equipment and land. Americans took on consumer debt for the first time. Unregulated banks made bad loans and held inadequate reserves. Investors, including middle-class people, speculated in the stock market. When all of these bubbles burst, economic chaos shook the nation.

Financial Chaos

In the late 1920s, banks ran amok—abandoning conservative standards to free up capital for risky investments. There were few government regulations to restrain them. By December 1930, banks were failing at an unprecedented rate. Citizens lost their savings; businesses lost the money they needed to operate.

Oct. 29 Dies Irae, lithograph by James N. Rosenberg

Courtesy of Library of Congress

Souvenir bank model, 1930s

Emergency money, 1930s

Unemployment

The depth and length of unemployment during the Great Depression was unique in American history. At its height in 1933, nearly 25 percent of the labor force was jobless. Unemployment stayed above 15 percent through the 1930s.

Letter to First Lady Eleanor Roosevelt begging for help, 1934

Courtesy of Franklin D. Roosevelt Presidential Library and Museum

Unemployed men outside a Chicago soup kitchen, 1931

Courtesy of National Archives

Agriculture in Crisis

American agriculture, which had peaked during the 1910s, went bust after World War I. Global demand for food and cotton fell, and prices crashed. Drought destroyed crops. Farmers could not repay loans. Finally, the shift from horse-powered to gas-powered farming equipment reduced the need for tenant farmers.

Olsen farm, South Dakota, 1936

Drought and poor farming practice turned much of the high plains into a dust bowl.

Courtesy of USDA Natural Resources Conservation Service

Florence Thompson, migrant laborer, 1936, by Dorothea Lange

Self-help

With no government safety net, Americans often banded together to survive. For example, Portia Sperry made opportunities for herself and others. She designed a doll, assembled a network of farmwomen to make it, and convinced Marshall Field to sell it.