Great Depression In The United States

The collapse of the US stock market in 1929 that led to a worldwide economic depression caused the Great Depression in the United States.

For most of the nation, the "Black Tuesday" (also sometimes referred to as "Black Thursday" or "Black Monday") stock market crash of October 29, 1929, marked the beginning of a decade of high unemployment, poverty, and deflation. Although some observers think the causes of the Great Depression are still uncertain, most economists have followed Milton Friedman's analysis and blame the national collapse on an unwillingness by the Federal Reserve System to supply reserves to the system when the banking system faced a run on its deposits. The traditional explanation of a combination of high consumer and business debt, ill-regulated markets that permitted malfeasance by banks and investors, growing wealth inequality, and natural disasters such as the Dust Bowl and 1926 Miami Hurricane creating a downward economic spiral of reduced spending and production are also offered as alternative explanations.

The initial government response to the crisis exacerbated the situation; protectionist policies like the Smoot-Hawley Tariff, rather than helping the economy, merely strangled global trade. Industries that suffered the most included agriculture, mining, and logging.

The depression caused major political changes, the most notable among them being the New Deal, which instituted large-scale federal relief programs aimed to aid the agricultural industry and support labor unions. The formation of the New Deal coalition by Franklin Delano Roosevelt was another notable accomplishment. This disaster had a profound effect on the psychology of an entire generation and strongly influenced the development of post-war monetary institutions.