THE GREAT DEPRESSION
IN THE UNITED STATES
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CAUSES OF THE GREAT
DEPRESSION
 The Stock Market Crash of 1929
 The Dust Bowl
Debt in the United States
The Smoot-Hawley Tariff Act
United States Federal Reserve
and Money Supply
United States Business
United States
President
Herbert Hoover
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Tenants were
replaced from the
land during the
Depression
THE STOCK MARKET CRASH
The Great Depression started in the United
States with the Stock Market Crash. The
crash took place on October 24, 1929, a
date that was called “Black Thursday.”
That day 12.9 million shares of stock were
traded after the stock market had been
surging since September with a record
high mark of 381.17. Many economic
leaders thought a stock market panic could
potentially occur. Richard Whitney, the
vice president of the stock market, hoped
to quell the solution by buying stock in
many businesses for more than the normal
price. This temporarily caused a halt in
trading, but this did not last long.
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A large crowd gathers outside of the
New York Stock Exchange
THE STOCK MARKET CRASH
Before long, national newspapers
began covering the activity with the
stock market. This prompted many
people to begin pulling out of the
market on Monday, October 28. The
market was down 13 percent by the
end of the day. The next day, known as
“Black Tuesday,” 16.9 million shares
of stock were traded, resulting in a loss
of $14 million on that one day. In total,
$30 million was lost during the fiveday period.
The trading room of the New York Stock
Exchange after the crash of 1929
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THE DUST BOWL
The Dust Bowl was a weather-related
occurrence that happened in the United
States from 1930 to 1936. It consisted of
dust storms that would cause much
damage to the American lands. There were
severe droughts, a normal occurrence in
these areas, made worse by unwise
farming practices. When deep plowing of
the land occurred, the grass was destroyed.
This caused the soil to dry up. When a
wind would come, the dried-up soil would
turn into dust and blow to the east and the
south. Some dark dust clouds reached as
far away as Washington, D.C., and New
York City. The states most affected by the
Dust Bowl were Kansas, New Mexico,
Oklahoma, Texas, and Colorado.
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This picture depicts a farmer and two of
his sons during one of the Dust Bowl
storms in Oklahoma.
DEBT IN AMERICA
The United States found itself in a
significant amount of debt at this time.
Americans had grown dependent on cheap
credit. In the short term, it seem liked a
good idea. But over time, both consumer
and commercial debt began to mount.
Those who were already in debt when the
prices for products decreased risked going
into default. A significant number of
layoffs occurred, resulting in an
unemployment rate of 25 percent. Those
who worried about their money began to
withdraw the majority of their money
from the bank. Banks were now in a panic,
and there was nothing that the Federal
Reserve could do to correct the situation.
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Industrial production in the United States,
from 1928 to 1939
DEBT IN AMERICA
The effect of the Stock Market Crash on the
Dow Jones Industrial Average in 1929
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The debt continued to grow in the
United States. This was due to the
price of products and the average
income of a United States citizen
falling close to 20 to 50 percent. All of
the debts, however, remained at the
same dollar amount. In the aftermath of
the panic of 1929 and for the majority
of 1930, approximately 744 U.S. banks
failed. In total, about 9,000 banks
failed during the 1930s. Those who had
deposited money lost about $140
billion in deposits. Banks were now
forced to build up their reserves and
give out fewer loans to people.
SMOOT-HAWLEY TARIFF
The Smoot-Hawley Tariff Act has been
blamed by many as one of the reasons
why the Great Depression was made
worse in the United States. The tariff
reduced international trade and caused
retaliatory tariffs to occur in other
countries. This tariff act caused American
exports to fall from $5.2 billion in 1929 to
$1.7 billion in 1933. Many products were
hit hard by this decline, such as cotton,
wheat, tobacco, and lumber. Historians
have stated that the decline in prices of
farm exports had caused many farmers in
the United States to default on their loans.
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Representative W.C. Hawley (left) and
Senator Reed Smoot shake hands on their
Smoot-Hawley Tariff Act.
U.S. FEDERAL RESERVE
& MONEY SUPPLY
Monetarists have accused the United States
Federal Reserve System of making poor
choices that allowed for problems in
banking in the United States to continue.
The Federal Reserve allowed the money
supply in the United States to shrink by
one-third from 1929 to 1933. Originally,
the downward turn of the economy, thanks
to the Stock Market Crash, would have
caused just another recession. But thanks to
large banks such as the Bank of the United
States failing, people began to panic.
The Seal of the United States
Federal Reserve System
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U.S. FEDERAL RESERVE
& MONEY SUPPLY
Businessmen were not able to get new
loans, nor could they renew their old ones
because there was little money available.
The amount of credit that the Federal
Reserve could give out was limited,
however, because there must be a little bit
of gold that backed the credit being issued.
By the time the Depression began, the
Federal Reserve had reached the limit.
The United States Federal Reserve
Building in Washington, D.C.
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UNITED STATES BUSINESS
When Franklin Delano Roosevelt was
elected United States president in
1932, he blamed the big businesses that
were prevalent in the United States.
Roosevelt, along with the majority of
Democrats, felt that business had too
much unregulated power. During his
many terms in office, Roosevelt would
try to fix the problems of the Great
Depression by implementing many
new programs and policies under the
New Deal.
United States President
Franklin D. Roosevelt
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