Great Depression Timeline: 1929 - 1941
The Great Depression lasted from August 1929 to June 1938, almost 10 years. The economy started to shrink in August, months before the stock market crash in October. It began growing again in 1938, but unemployment remained above 10% until 1941. That's when the United States entered World War II. This timeline covers significant events from 1929 through 1941.
- The Great Depression was a worldwide economic crisis, deemed the worst of its kind in the 20th century.
- The system of the gold standard, which linked other countries’ currencies to the U.S. dollar, played a major role in spreading the downturn internationally.
- Black Thursday launched the stock market crash of 1929, which kicked off the Great Depression.
- A severe drought along with bad farming practices led to the Dust Bowl, worsening the economic outlook of many Americans.
- President Hoover’s laissez-fair economic and protectionist policies were blamed for exacerbating the Depression.
- Franklin D. Roosevelt’s New Deal was an economic recovery plan that instituted programs for relief and reform.
March 4: Herbert Hoover became president. His laissez-faire economic policies did little to stop the Depression. He believed a free-market economy would allow the forces of capitalism to fix any economic downturn. As a result, he lowered the top income tax rate from 25% to 24%.
August: The economic activity from the Roaring Twenties reached its peak. After that, it started to contract. It was the true start of the Great Depression. That same month, the Federal Reserve raised the discount rate from 5% to 6% to prevent inflation and defend the gold standard.
September 3: Dow reached a closing record of 381.7. The stock market would not return to its pre-crash high for the next 25 years.
October 25 and 26: Stocks gained 1% on Friday but lost 1% during a half-day of trading on Saturday.
October 28: On Black Monday, stocks prices fell 13%.
October 29: On Black Tuesday, the market lost another 12% as a record 16 million shares were traded. When banks intervened this time, they worsened the panic.
November 23: The stock market hit bottom and began trading sideways.
December: The unemployment rate was still just 3.2%. Since unemployment is a lagging indicator, it hadn't started to worsen yet.
There were 650 bank failures. As banks failed, it reduced the money supply because there was less credit available. That meant each dollar was worth more. As the value of the dollar rose, prices fell. That reduced revenue for businesses. It also meant that debt cost more for lenders to pay back. That created a ripple effect of personal and business bankruptcies.
June 17: Hoover signed the Smoot-Hawley Tariff Act, which raised taxes on 900 imports. It originally was supposed to help farmers but ended up imposing tariffs on hundreds of other products. Other countries retaliated, setting off a trade war. As a result, international trade began to collapse.
A drought hit 23 states from the Mississippi River to the mid-Atlantic region. It was the first of what was later called the Dust Bowl drought, the worst in 300 years. As crops failed, farmers could not produce enough to eat. At first, President Hoover asked the American Red Cross to help. As the crisis worsened, Congress appropriated $65 million for seed, feed, and food boxes.
July 21: Hoover created the Department of Veterans Affairs.
November 7: The Bank of Tennessee failed. That led to failures of affiliate banks in the next few days. Although the economy was improving, weaknesses in the banking system pulled it back down. Only one-third of the nation's 24,000 banks belonged to the Federal Reserve banking system. Non-members did not have enough access to reserves to fend off bank runs. As bank failures grew, depositors rushed to banks to pull out their savings. Banks only hold 10% of all deposits, so they can lend out the rest. A bank run will quickly put it out of business. In the fall of 1930, bank runs spread throughout the Southeastern United States. By the end of the year, 1,300 banks had failed.
December 11: The Bank of the United States failed. It was the fourth-largest bank in the nation, and the largest bank failure in history at that time. Worried about budget deficits, Hoover returned the top income tax rate to 25%. The economy shrank 8.5%. The unemployment rate rose to 8.7%. Deflation set in as prices fell 6.4%.
February: Food riots broke out in Minneapolis.
The drought continued, hitting eight Southern states the worst. It was the worst drought in the 20th century for Arkansas.
The economy shrank 6.4%. The unemployment rate rose to 15.9%. Prices fell another 9.3%. People began to suffer the worst effects of the Great Depression.
January: Congress created the Reconstruction Finance Corporation to lend $2 billion to financial institutions to prevent further failures. In July, Congress authorized it to lend money to states for relief.
March: Economy bottomed after shrinking 27% since its peak in August 1929.
June 6: Hoover signed the Revenue Act of 1932. It increased the top income tax rate to 63%. He wanted to reduce the federal deficit. Hoover believed it would also restore confidence. Instead, higher taxes worsened the Depression.
July 8: Dow bottomed at 41.22. That was a 90% slide from its September 1929 pre-crash high.
September: Bank failures slowed, construction contracts increased 30% and department store sales rose 8 percent.
Fourteen dust storms hit the Midwest. The economy shrank 12.9%, unemployment rose to 23.6%, and prices fell 10.3%.
March 20: The Government Economy Act cut government spending to finance the New Deal.
March 22: The Beer-Wine Revenue Act ended Prohibition and taxed alcohol sales to raise revenue.
March 31: The Civilian Conservation Corps was launched to hire 3 million workers to maintain public lands.
April 19: FDR stopped a run on gold by abandoning the gold standard. He ordered everyone to exchange private gold for dollars.
May: The Federal Emergency Relief Act created more federal jobs. The Agricultural Adjustment Act paid farmers to limit crops, thus raising prices. The Emergency Farm Mortgage Act provided loans to save farms from foreclosure. The Tennessee Valley Authority Act built power stations in the poorest area in the nation. The Securities Act required companies to educate investors when issuing stocks.
June: The government stopped repaying dollars with gold. The Home Owners Loan Corporation refinanced mortgages to prevent foreclosures. The Glass-Steagall Act separated investment banking from retail banking and created the Federal Deposit Insurance Corporation. The National Industrial Recovery Act created the Public Works Administration, which added more jobs. The National Recovery Administration outlawed child labor, established a minimum wage, and limited the workday to eight hours. It also allowed trade unions to bargain with employers. The Emergency Railroad Transportation Act coordinated the national railway systems.
November 8: The Civil Works Administration created 4 million construction jobs.
Forty-eight dust storms pummeled Oklahoma and surrounding states. Farmers slaughtered 6 million pigs to reduce supply and boost prices. The public criticized the waste of food. FDR created the Federal Surplus Relief Corporation to use excess farm output to feed the poor.
The economy shrank 1.3%. Unemployment rose to a record 24.9%. Prices rose 0.8%. The national debt was $23 billion.
January 30: The Gold Reserve Act prohibited private ownership of gold and doubled its price. The act changed gold price history.
April 15: Black Sunday was the worst dust storm ever. FDR passed the Soil Conservation Act to teach farmers sustainable methods.
June 27: The Federal Housing Administration provided federal mortgage insurance. The Securities and Exchange Commission regulated the stock market. The FCC consolidated all federal regulation of telephone, telegraph, and radio communications.
The year recorded the hottest temperatures on record. There were 29 consecutive days with temperatures at or above 100 degrees. By the end of the year, droughts covered 75% of the country and 27 states. Almost 80% of the country recorded extremely dry conditions.
The economy grew 10.8% in response to the New Deal Programs. Unemployment fell to 21.7%. Prices rose 1.5%. The debt rose to $27 billion.
The Supreme Court declared the National Industrial Recovery Act unconstitutional. FDR launched more programs focused on the poor, the unemployed, and farmers.
February 26: The Soil Conservation & Domestic Allotment Act paid farmers to plant soil-building crops.
April 8: The Emergency Relief Appropriation created the Works Progress Administration to hire 8.5 million people.
May 20: The Rural Electrification Act helped farms to generate electricity for their areas.
July: The National Labor Relations Act/Wagner Act protected workers' rights and created the National Labor Relations Board.
April 30: The Resettlement Administration trained and provided loans to farmers.
August: The Social Security Act provided income to the elderly, the blind, the disabled, and children in low-income families. It was paid for with payroll taxes and the Social Security Trust Fund.
Economy grew 8.9%. Unemployment fell to 20.1%. Prices rose 3.0%. The debt rose to $29 billion.
June: The hottest summer on record began. Eight states experienced temperatures at 110 degrees or greater.
July: Twelve additional states experienced temperatures at or above 110 degrees, including four that broke 120 degrees.
August: Texas experienced record-breaking temperatures of 120 degrees.
Throughout the year, the heat wave directly killed 1,693 people. Another 3,500 people drowned while trying to cool off.
FDR raised the top tax rate to 79%. The economy grew 12.9%. Unemployment shrank to 16.9%. Prices rose 1.4%. The debt grew to $34 billion.
FDR began his second term. He launched a third New Deal. The Wagner-Steagall Act funded state-run public housing projects. The Bonneville Power Administration delivered and sold power from the Bonneville Dam. The Farm Tenancy Act provided loans for tenant farmers to buy farms. The Farm Security Administration replaced the Resettlement Administration.
FDR cut spending to reduce the debt. That cutback in New Deal spending pushed the economy back into the Depression. FDR pushed Congress to enact a $5 billion relief program. It included the Federal National Mortgage Association that resold mortgages on the secondary market. The New Agricultural Adjustment Act remedied the 1933 AAA. The Fair Labor Standards Act established the U.S. minimum wage, overtime pay, and youth employment standards.
May: The economy started contracting again, as the Depression resumed.
For the year, the economy grew 5.1%, unemployment fell to 14.3%, and prices rose 2.9%. The debt rose to $37 billion.
In 1938, FDR abolished mark to market accounting. Some experts believed it forced many banks out of business. The rule forced banks to write down their real estate as values fell. FDR's new rule allowed them to keep these assets on their books at historical prices.
June: The economy started to grow again. The Great Depression was over.
For the year, the economy shrank 3.3%. Unemployment rose to 19%. Prices fell 2.8%. The debt remained steady at $37 billion.
The drought returned. Louisiana experienced record temperatures.
The Federal Security Agency was launched to administer Social Security, federal education funding, and food and drug safety.
September: Hitler invaded Poland, starting World War II.
November: FDR convinced Congress to repeal the U.S. military arms embargo to France and Britain.
The economy grew 8%, unemployment fell to 17.2%, and prices remained flat. The debt rose to $40 billion.
June: Hitler conquered France and bombed London. The United States began sending arms to Britain. Congress reinstated the military draft.
FDR increased the defense budget and raised the top income tax rate to 81%.
The economy grew 8.8%. Unemployment fell to 14.6%. Prices crept up 0.7%. The debt rose to $51 billion.
FDR began his third term.
The drought ended as near-normal rainfall returned.
March: The United States sent war supplies to England.
October: Germany sank a U.S. Navy destroyer.
December 7, 1941: Japan attacked the Pearl Harbor Navy base. Congress declared war on Japan.
The economy grew 17.7%, unemployment plummeted to 9.9%, and prices rose 9.9%. The debt grew to $58 billion. In total, FDR created the greatest percentage increase in U.S. debt by a president.