THE GREAT DEPRESSION

The Great Depression

The Great Depression

Timeline History Of The Period Surrounding The Great Depression

1920s (Decade)

During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy. (McElvaine, 2003)

An average of 600 banks fail each year.

Agricultural, energy and coal mining sectors are continually depressed. Textiles, shoes, shipbuilding and railroads continually decline.

1922

The conservative Supreme Court strikes down federal child labor legislation.

1923

President Warren Harding dies in office; his administration was easily one of the most corrupt in American history. Calvin Coolidge, who is squeaky clean by comparison, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government. He announces to the American people: "The business of America is business."

Supreme Court nullifies minimum wage for women in District of Columbia.

1924

The Ku Klux Klan reaches the height of its influence in America: by the end of the year it will claim 9 million members. It will decline drastically in 1925, however, after financial and moral scandals rock its leadership.

The stock market begins its spectacular rise. Bears little relation to the rest of the economy.

1925

The top tax rate is lowered to 25 percent - the lowest top rate in the eight decades since World War I.

Supreme Court rules that trade organizations do not violate anti-trust laws as long as some competition survives.

1928

The construction boom is over.

Farmers' share of the national income has dropped from 15 to 9 percent since 1920.

1929

Herbert Hoover becomes President. Hoover is a staunch individualist but not as committed to laissez-faire ideology as Coolidge.

More than half of all Americans are living below a minimum subsistence level.

Annual per-capita income is $750; for farm people, it is only $273.

Backlog of business inventories grows three times larger than the year before. Public consumption markedly down.

1930

By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Expands the money supply with a major purchase of U.S. securities. However, for the next year and a half, the Fed will add very little money to the shrinking economy. (At no time will it actually pull money out of the system.) Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: "Liquidate labor, liquidate stocks, liquidate real estate… values will be adjusted, and enterprising people will pick up the wreck from less-competent people."

The first bank panic occurs later this year; a public run on banks results in a wave of bankruptcies. Bank failures and deposit losses are responsible for the contracting money supply. (Parker, 2002)

Supreme Court rules that the monopoly U.S. Steel does not violate anti-trust laws as long as competition exists, no matter how ...