Great Depression

World economic crisis 1929–late 1930s, sparked by the Wall Street crash of 29 October 1929. It was the longest and most devastating depression in the Western world in modern history.

The Great Depression was precipitated by the Wall Street crash when millions of dollars were wiped off US share values in a matter of hours. This forced the closure of many US banks involved in stock speculation and led to the recall of US overseas investments. This loss of US credit had serious repercussions on the European economy, especially that of Germany, and led to a steep fall in the levels of international trade as countries attempted to protect their domestic economies. Although most European countries experienced a slow recovery during the mid 1930s, the main impetus for renewed economic growth was provided by rearmament programmes later in the decade.

On a personal level, thousands of stockholders lost vast sums of money. Bank, business, and factory closures left millions of Americans facing unemployment and poverty. Many people were forced to seek charity for food and shelter. During this time public opinion swayed against Prohibition, and there was widespread disdain for the law. Organized crime increased, led by notorious gangsters such as Al Capone.

President Herbert Hoover was greatly criticized for his opposition to federal relief to the unemployed and for the development of poor shantytowns around cities, nicknamed ‘Hoovervilles’, were further evidence of his inability to cope with the effects of the depression. Democrat Franklin D Roosevelt soundly defeated Hoover in the 1932 presidential election and his New Deal social and reform programme restored faith in the US economy.