Timeline of the Great Depression: 1929

From August 1929 to June 1938, the Great Depression lasted nearly a decade. The economy began to contract in August 1929, months before the stock market crash in October. Although the economy began to grow again in 1938, unemployment remained above 10% until 1941. That was the start of the United States' involvement in World War II. From 1929 to 1941, significant events are covered in this timeline.

Important Points to Remember

The Great Depression was a global economic depression that was regarded as the worst of its kind in the twentieth century.
The global spread of the downturn was aided by the gold standard, which tied other countries' currencies to the U.S. dollar.
On Black Thursday, 1929, the stock market crash that ushered in the Great Depression began.
The Dust Bowl was caused by a severe drought combined with poor farming practices, which worsened many Americans' economic prospects.
The Depression was exacerbated by President Hoover's laissez-faire economic and protectionist policies.
The New Deal, initiated by Franklin D. Roosevelt, was an economic recovery plan that included relief and reform programs.

1929

Herbert Hoover was elected president on March 4. His economic policies of laissez-faire did little to avert the Great Depression.
He believed that a free-market economy would allow capitalism's forces to correct any economic downturn. As a result, he reduced the top marginal income tax rate from 25% to 24%.
August: The Roaring Twenties' economic activity reaches its pinnacle. It began to contract after that. It marked the beginning of the Great Depression.
In order to prevent inflation and defend the gold standard, the Federal Reserve raised the discount rate from 5% to 6% in the same month.
The Dow Jones Industrial Average closed at 381.7 on September 3, a new high. For the next 25 years, the stock market would not reach its pre-crash high.
The stock market crash of 1929 began on October 24, known as Black Thursday. Stock prices plummeted by 11% right away.
Stocks were bought by Wall Street bankers, and the market only lost 2% by the end of the day.
Stocks rose 1% on Friday but fell 1% during a half-day of trading on Saturday.
On Black Monday, October 28, stock prices fell 13%.
October 29: The market fell another 12% on Black Tuesday, with a total of 16 million shares traded, setting a new high. The panic was exacerbated when banks intervened this time.
The stock market fell to its lowest point on November 23 and began to trade sideways.
The unemployment rate remained at 3.2 percent in December. Unemployment had not yet begun to worsen because it is a lagging indicator.
In 1929, over 650 banks failed, continuing a trend that began in the 1920s. Because there was less credit available when banks failed, the money supply shrank. This increased the value of each dollar.
Prices fell as the value of the dollar increased, lowering revenue for businesses. It also meant that lenders would have to pay a higher interest rate on their debts.
This resulted in a cascade of personal and business bankruptcy filings.

1930

Hoover signed the Smoot-Hawley Tariff Act on June 17, raising tariffs on 900 imports. Although it was meant to help farmers, it actually resulted in tariffs being placed on hundreds of other goods.
As a result, other countries retaliated, igniting a trade war. International trade began to suffer as a result.
From the Mississippi River to the mid-Atlantic region, 23 states were affected by a drought. It was the start of the Dust Bowl drought, which was the worst in 300 years.
Farmers were unable to produce enough food as crops failed. Hoover initially sought assistance from the American Red Cross. As the crisis grew worse, Congress set aside $65 million for seed, feed, and food boxes.
Hoover established the Department of Veterans Affairs on July 21.
The Bank of Tennessee failed on November 7. In the following days, affiliate banks failed as a result of this. Despite the fact that the economy was improving, the banking system's flaws dragged it back down.
Only a third of the 24,000 banks in the United States were members of the Federal Reserve banking system. Non-members lacked sufficient access to reserves to prevent bank runs.
Depositors rushed to banks to withdraw their savings as bank failures increased. Banks only held 10% of all deposits, allowing them to lend out the rest. It would be put out of business quickly if a bank ran.
Bank runs erupted across the Southeastern United States in the fall of 1930. More than 1,300 banks had failed by the end of the year.
The Bank of the United States failed on December 11. It was the country's fourth-largest bank and, at the time, the largest bank failure in history.
Concerned about budget deficits, Hoover raised the top marginal tax rate to 25%. The economy contracted by 8.5 percent.
The unemployment rate has risen to 8.7%. As prices fell by 6.4 percent, deflation set in.

1931

Food riots erupted in Minneapolis in February.
The drought persisted, wreaking havoc on eight Southern states in particular. Arkansas experienced its worst drought in the twentieth century.
The economy contracted by 6.4 percent. The unemployment rate has risen to 15.9%. Prices dropped by another 9.3%.
The worst effects of the Great Depression began to be felt.

1932

In January, Congress established the Reconstruction Finance Corporation to lend $2 billion to financial institutions to prevent further failures. Congress gave it permission to lend money to states for relief in July.
February: As part of its open market operations, the Fed purchased $1 billion in securities from banks. This provided additional liquidity to cash-strapped banks.
March: The economy reached a nadir, having shrunk by 27% since its peak in August 1929.
The Revenue Act of 1932, signed by Hoover on June 6, raised the top income tax rate to 63 percent. He desired a reduction in the federal deficit.
This, according to Hoover, would also restore economic confidence. Increased taxes, on the other hand, exacerbated the recession.
The Dow Jones Industrial Average hit a low of 41.22 on July 8. That was a 90% drop from the pre-crash high in September 1929.
September saw a decrease in bank failures, a 30% increase in construction contracts, and an 8% increase in department store sales.
Fourteen dust storms hit the Midwest. The economy shrank by 12.9%, unemployment increased to 23.6 percent, and prices fell by 10.3%.

1933

The Emergency Banking Act, signed by Franklin Delano Roosevelt on March 9, kicked off the New Deal. To avoid catastrophic failures, it closed all U.S. banks.
On March 20, the Government Economy Act was passed to reduce government spending in order to fund the New Deal.
The Beer-Wine Revenue Act of 1933 repealed Prohibition and raised revenue by taxing alcohol sales.
On March 31, the Civilian Conservation Corps was established with the goal of hiring 3 million people to assist in the maintenance of public lands.
FDR abandoned the gold standard on April 19, putting an end to a gold run. He gave everyone the order to exchange their personal gold for dollars.
May: More federal jobs were created as a result of the Federal Emergency Relief Act. The Agricultural Adjustment Act compensated farmers for limiting their crop production, thereby raising prices.
Farmers in danger of losing their land were given loans under the Emergency Farm Mortgage Act. The Tennessee Valley Authority Act enabled the construction of power plants in the poorest parts of the country.
When companies issue stocks, the Securities Act requires them to educate investors.
The government stopped repaying dollars in gold in June. To avoid foreclosures, the Home Owners Loan Corporation refinanced mortgages.
The Glass-Steagall Act established the Federal Deposit Insurance Corporation and separated investment banking from retail banking. The Public Works Administration was established by the National Industrial Recovery Act, which created more jobs.
Child labor was outlawed, a minimum wage was established, and the workday was limited to eight hours under the National Recovery Administration. It also gave labor unions the ability to bargain with employers.
The Emergency Railroad Transportation Act brought the country's railway systems together.
The Civil Works Administration (CWA) created 4 million construction jobs on November 8.
Forty-eight dust storms hit Oklahoma and the surrounding states. Farmers slaughtered six million pigs in order to reduce supply and raise prices.
The public was outraged at the food waste. FDR established the Federal Surplus Relief Corporation to use surplus farm output to feed the poor.
The economy contracted by 1.3 percent. Unemployment reached a new high of 24.9 percent. Prices increased by 0.8 percent. The national debt stood at $23 billion at the time.

1934

The Gold Reserve Act, enacted on January 30, prohibited the private ownership of gold and doubled its price. The act altered the course of gold's price history.
The worst dust storm ever occurred on April 15, dubbed "Black Sunday." To teach farmers sustainable methods, FDR passed the Soil Conservation Act.
The Federal Housing Administration issued federal mortgage insurance on June 27. The stock market was regulated by the Securities and Exchange Commission.
The Federal Communications Commission (FCC) consolidated all federal regulations of telephone, telegraph, and radio communications.
The hottest year on record occurred this year. There were 29 days in a row with temperatures of 100 degrees or higher.
Droughts had affected 75% of the country and 27 states by the end of the year. Nearly 80% of the country experienced extremely dry conditions.
As a result of the New Deal programs, the economy grew by 10.8%. Unemployment has decreased to 21.7 percent. Prices increased by 1.5 percent. The debt has now reached $27 billion.

1935

The National Industrial Recovery Act was declared unconstitutional by the Supreme Court. FDR launched more programs aimed at the poor, unemployed, and farmers.
The Soil Conservation & Domestic Allotment Act was signed into law on February 26, and it paid farmers to plant soil-building crops.
The Works Progress Administration was established on April 8 as part of the Emergency Relief Appropriation to hire 8.5 million people.
May 20: The Rural Electrification Act aided farms in producing electricity for their communities.
July: The National Labor Relations Act/Wagner Act established the National Labor Relations Board and protected workers' rights.
The Resettlement Administration provided farmers with training and loans on April 30.
August: The Social Security Act provided financial assistance to the elderly, blind, disabled, and low-income children. Payroll taxes and Social Security benefits funded it.
The economy grew by 8.9%. Unemployment has dropped to 20.1%. Prices increased by 3.0%. The debt has now reached $29 billion.

1936

The hottest summer on record began in June. Temperatures of 110 degrees or higher were recorded in eight states.
July: Twelve more states experienced temperatures of 110 degrees or higher, with four of them breaking 120 degrees.
August saw Texas set a new high-temperature record of 120 degrees.
The heat wave killed 1,693 people directly over the course of the year. Another 3,500 people died while attempting to cool off in the water.
The top tax rate was raised to 79 percent by FDR. The economy grew at a rate of 12.9 percent.
Unemployment has dropped to 16.9%. Prices increased by 1.4 percent. The debt now stands at $34 billion.

1937

FDR started his second term in office. He launched a third New Deal.
The Wagner-Steagall Act provided funding for state-run public housing initiatives. The Bonneville Power Administration was in charge of delivering and selling electricity generated by the Bonneville Dam.
Tenant farmers could get loans to buy farms under the Farm Tenancy Act. The Resettlement Administration was replaced by the Farm Security Administration.
To reduce the debt, FDR cut spending. The economy was pushed back into the Depression as a result of the reduction in New Deal spending.
Roosevelt also pushed for a $5 billion relief program to be passed by Congress. The Federal National Mortgage Association, which resold mortgages on the secondary market, was among them.
The New Agricultural Adjustment Act amended the 1933 Agricultural Adjustment Act. The Fair Labor Standards Act established minimum wage, overtime pay, and employment standards for minors in the United States.
May: As the Depression resurfaced, the economy began to contract once more.
The economy grew by 5.1 percent last year, unemployment fell to 14.3 percent, and prices increased by 2.9 percent. The debt has now reached $37 billion.

1938

FDR abolished mark-to-market accounting in 1938. Many banks, according to some experts, were forced out of business as a result.
As real estate values dropped, the rule forced banks to write down their assets. They were able to keep these assets on their books at historical prices thanks to FDR's new rule.
June: The economy began to recover. The Great Depression had come to an end.
The economy shrank by 3.3 percent for the year. Unemployment has risen to 19%. Prices dropped by 2.8 percent.
At $37 billion, the debt remained unchanged.

1939

Drought has returned. Temperatures in Louisiana reached new highs.
The Federal Security Agency was established to oversee the administration of Social Security, federal education funding, and food and drug safety.
September: World War II begins with Hitler's invasion of Poland.
November: FDR persuaded Congress to lift the military arms embargo against France and the United Kingdom.
The economy expanded by 8%, unemployment fell to 17.2%, and prices remained unchanged. The debt has now reached $40 billion.

1940

Hitler conquered France and bombed London in June. The US began supplying weapons to the United Kingdom. The military draught was reinstated by Congress.
FDR increased the defense budget while also raising the top tax rate to 81 percent.
The economy expanded by 8.8%. Unemployment has dropped to 14.6%. Prices increased by 0.7%. The debt has now reached $51 billion.

1941

FDR started his third term in office.
As near-normal rainfall returned, the drought came to an end.
In March, the United States dispatched war supplies to England.
Germany sank a U.S. Navy destroyer in October.
Japan attacked Pearl Harbor on December 7, 1941. The United States Congress declared war on Japan.
The economy expanded by 17.7%, unemployment fell to 9.9%, and prices increased by 9.9%. The debt now stands at $58 billion.
FDR amassed the largest percentage increase in U.S. debt of any president.

1954

The Dow Jones Industrial Average closed at 382.74 on November 23. That was the first time it surpassed the previous high of 381.7, set on September 3, 1929.

Most Commonly Asked Questions (FAQs)

What happened at the end of the Great Depression?

World War II provided the impetus for the United States to emerge from the Great Depression fully. As the United States mobilized its economy for the war effort, it increased production, reduced unemployment, and eventually brought the Depression to an end.

What was the severity of the Great Depression?

According to the Federal Reserve, the Great Depression was "the longest and deepest downturn in the history of the United States and the modern industrial economy." It has had an unprecedented impact on production, unemployment, and long-term economic stagnation in the modern era.

During the Great Depression, how many people died?

During the Great Depression, death rates did not rise in general. During the worst period of the Great Depression, from 1930 to 1933, mortality rates fell, and life expectancy rose. Suicide rates rose during the worst recession, but they still accounted for less than 2% of all deaths. The quality of life was certainly impacted, but this did not appear to be linked to an increase in the number of deaths.