Great Depression

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.
USA annual real GDP from 1910 to 1960, with the years of the Great Depression (1929–1939) highlighted
The unemployment rate in the U.S. during 1910–60, with the years of the Great Depression (1929–39) highlighted

The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries it started in 1929 and lasted until the late-1930s.[1] It was the longest, deepest, and most widespread depression of the 20th century.[2] In the 21st century, the Great Depression is commonly used as an example of how intensely the world's economy can decline.[3]

The Great Depression started in the United States after a major fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday). Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. By comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession.[4] Some economies started to recover by the mid-1930s. However, in many countries the negative effects of the Great Depression lasted until the beginning of World War II.[5]

The Great Depression had devastating effects in countries both rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25% and in some countries rose as high as 33%.[6]

Cities around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming communities and rural areas suffered as crop prices fell by about 60%.[7][8][9] Facing plummeting demand with few alternative sources of jobs, areas dependent on primary sector industries such as mining and logging suffered the most.[10]

Start

The Dow Jones Industrial, 1928–30

Economic historians usually attribute the start of the Great Depression to the sudden devastating collapse of U.S. stock market prices on October 29, 1929, known as Black Tuesday. However,[11] some dispute this conclusion and see the stock crash as a symptom, rather than a cause, of the Great Depression.[6][12]

Even after the Wall Street Crash of 1929 optimism persisted for some time. John D. Rockefeller said "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."[13] The stock market turned upward in early 1930, returning to early 1929 levels by April. This was still almost 30% below the peak of September 1929.[14]

Together, government and business spent more in the first half of 1930 than in the corresponding period of the previous year. On the other hand, consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by 10%. In addition, beginning in the mid-1930s, a severe drought ravaged the agricultural heartland of the U.S.[15]

By mid-1930, interest rates had dropped to low levels, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed.[16] By May 1930, automobile sales had declined to below the levels of 1928. Prices in general began to decline, although wages held steady in 1930. Then a deflationary spiral started in 1931. Farmers faced a worse outlook; declining crop prices and a Great Plains drought crippled their economic outlook. At its peak, the Great Depression saw nearly 10% of all Great Plains farms change hands despite federal assistance.[17]

The decline in the U.S. economy was the factor that pulled down most other countries at first; then, internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade.[18] By 1933, the economic decline had pushed world trade to one-third of its level just four years earlier.[19]

Economic indicators

Change in economic indicators 1929–32[20]

United States United Kingdom France Germany
Industrial production −46% −23% −24% −41%
Wholesale prices −32% −33% −34% −29%
Foreign trade −70% −60% −54% −61%
Unemployment +607% +129% +214% +232%
Other Languages
Afrikaans: Groot Depressie
aragonés: Gran Depresión
asturianu: Gran Depresión
azərbaycanca: Böyük böhran
বাংলা: মহামন্দা
Bân-lâm-gú: Tōa Siau-tiâu
башҡортса: Бөйөк депрессия
беларуская: Вялікая дэпрэсія
беларуская (тарашкевіца)‎: Вялікая дэпрэсія
brezhoneg: Enkadenn Veur
español: Gran Depresión
Esperanto: Granda Depresio
فارسی: رکود بزرگ
Fiji Hindi: Great Depression
한국어: 대공황
հայերեն: Մեծ ճգնաժամ
हिन्दी: महामन्दी
Bahasa Indonesia: Depresi Besar
íslenska: Kreppan mikla
къарачай-малкъар: Уллу депрессия
қазақша: Ұлы тоқырау
Kiswahili: Mdororo Mkuu
latviešu: Lielā depresija
Bahasa Melayu: Zaman Meleset
Mirandés: Grande Depresson
монгол: Их хямрал
नेपाल भाषा: तधंगु मन्दी
日本語: 世界恐慌
norsk nynorsk: Den store depresjonen
português: Grande Depressão
русиньскый: Велика депресія
саха тыла: Улуу кэхтии
Simple English: Great Depression
српски / srpski: Велика криза
srpskohrvatski / српскохрватски: Velika ekonomska kriza
татарча/tatarça: Бөек депрессия
українська: Велика депресія
vepsän kel’: Sur' depressii
Tiếng Việt: Đại khủng hoảng
吴语: 大萧条
粵語: 大蕭條
中文: 大萧条