The Great Depression was an economic depression in the United States, starting on October 24, 1929, with the stock market crash on Black Thursday. This was the most damaging economic depression that the United States has faced so far. The unemployment rate soared to around 25%, and many investors in the stock market instantly lost all their wealth.

Some long-term causes of the Great Depression were:

Corporate fraud, which was exacerbated by economic policies of previous presidents before the stock market crash.
Risk-taking banks that used money invested in them to try to make more money without leaving a margin behind in reserves.
The rise of credit, which kept many Americans in debt for purchases they did not really need.
The decrease in demand for American-made goods in Europe.
War reparations from Germany, which used American loans to give money back to France and England, which used that money to repay their American loans, putting great stress on American banks.

Some short-term causes of the Great Depression were:

Collapse of consumer confidence, which prompted companies to produce less goods.
Failure of banks because most people were trying to get their money out of the bank before it failed.

The stock market collapse in 1929 was just the beginning of a series of events that would drive the country into the Great Depression. With funding from the stock market gone and people buying fewer goods because they couldn't afford them, companies cut back on production, which furthered the economic depression and caused many people to be laid off, as the companies were unable to pay them anymore.

Hoover's Administration

Herbert Hoover was president during the Great Depression, and he became extremely unpopular due to his policies failing to fix the economy. Though Hoover was a Republican, he did not support the laissez-faire economic policies that most other Republicans supported. Throughout his presidency, Hoover initiated many programs intended to help fix the economy, however, most of these backfired and exacerbated the problem instead of fixing it.

One example of this was his urging of companies to leave wages as they were pre-depression instead of lowering them. This might have seemed like a good idea at the time, but the companies which were producing less materials and losing money could not keep workers' wages the same as before, so instead of lowering them, the workers were fired, which increased the problem of unemployment.

The Hoover Administration created many policies that FDR incorporated into his New Deal plan when he arrived in office. Even though he created many of the policies that the New Deal was composed of, Hoover did not agree with it, and was thus prohibited from serving a public role under Roosevelt's presidency.

One of the biggest mistakes of the Hoover administration was its way of handling the Bonus Army. This was a group of WWI veterans who requested the payment of their bonuses promised to them by the government for their services in WWI. This issue had been brought up and dismissed before, but in the Great Depression, many veterans lost their jobs and needed the bonuses to survive, so, they decided to march on the capital to demand their bonuses. 15-20,000 veterans marched on the capital and set up camp there to protest. General MacArthur, thinking that these veterans were communists and trying to riot, drove the protesters out of the capital using bayonets and tear gas.

The New Deals

The First New Deal

When Franklin Delano Roosevelt succeeded Herbert Hoover as President of the United States, he had just taken control of a country that was in the midst of the greatest economic crisis it had ever seen. In an attempt to fix the crisis, or at least lessen it, FDR came up with the New Deal, which lasted from 1933-34, a group of policies and institutions, many of which were already partly implemented by his predecessor.

Some of the policies and institutions created by the New Deal include:

The Civilian Conservation Corps (CCC)
The Agricultural Adjustment Act (AAA)
The Tennessee Valley Authority (TVA)
The National Recovery Admin. (NRA)
The Emergency Banking Act
The Glass-Steagall Act, separating savings and investment banking.

The Civilian Conservation Corps, or CCC, was an organization employing millions of men between the ages of 18-25 from 1933-42. For $30 a month, $25 of which would be sent back to their families, these workers would do many jobs in national parks throughout the country, such as planting trees, constructing roads, lodges, trails, and even parts of the Blue Ridge Parkway.

The Agricultural Adjustment Act, or AAA, was an act passed by the government in the Great Depression, encouraging farmers to reduce crop production to let the soil regenerate nutrients (dry soil and droughts led to the Dust Bowl in the 1930s) and let crop prices go back up. The AAA even paid farmers to not plant crops and plow under their crops to fertilize the soil. This act was ruled unconstitutional in 1936.

The Tennessee Valley Authority, or TVA, is a federally owned electric utility corporation that was created as part of the First New Deal to provide cheap electricity to the Tennessee Valley, which was destitute, as well as job opportunities for people in the region. The TVA still operates to this day, and provides electricity for all of Tennessee, as well as portions of Alabama, Mississippi, and Kentucky.

The National Recovery Administration, or NRA, was an organization created during the First New Deal, which authorized the President to create industry-wide codes intended to address some problems that led to or were created by the Great Depression. Codes issued by the NRA included establishing minimum wages and maximum hours and guaranteeing workers the right of collective bargaining, as well as others intended to eliminate unfair trade practices and reduce unemployment. The NRA was ruled unconstitutional in 1935, but during its lifetime, it issued over 750 different codes and affected 22 million workers.

The Emergency Banking Act was passed during the first days of Roosevelt's presidency, and it ordered all banks to close for two weeks while they were inspected to see if they could continue to function or had to go insolvent. The act also created the Federal Deposit Insurance Corporation, which would insure bank deposits up to a certain amount, an action intended to restore Americans' confidence in their banking system.

The Second New Deal

When it was clear that these actions were not enough, a second New Deal was started. Lasting from 1935-37, this Second New Deal created more institutions and policies intended to help fix the Great Depression, some of which are still used today.

Some of the policies and institutions created by the Second New Deal include:

The Works Progress Admin. (WPA)
The Rural Electrification Admin. (REA)
The Social Security Act
The Wagner Act, granting private sector employees the right to organize into unions.
The Fair Labor Standards Act

The Work Progress Administration, or WPA, was an agency created during the Second New Deal to employ people across the United States in both 'white-collar' (or intellectual) and 'blue-collar' (or manual) labor. This organization employed over 8 million people in its lifetime from 1935-43. However, it was criticized for spending taxpayer money on busywork, and competing with businesses for labor.

The Rural Electrification Administration, or REA, was an organization created during the Second New Deal to provide rural areas (especially farms) around the United States with electricity, building electrical and telephone networks in these areas and installing converters and sockets in homes.

The Social Security Act was the most important addition of the Second New Deal, granting a pension to older people over a certain age or people who suffered a major disability. Social Security is funded through payroll taxes, or taxes that take a percentage of a worker's salaries.

The Fair Labor Standards Act is a labor law created during the Second New Deal, creating the right to a minimum wage and overtime pay when a person works over 40 hours in a week, as well as prohibiting child labor.

Conclusion

The Great Depression was the most damaging economic depression in the United States, affecting the country for years. Government stepped in, trying to fix the economy, with varying results. The effects of the Great Depression and some policies and organizations created during this time in history remain in effect today. The Great Depression only really ended in the early 1940s, when unemployment fell back down due to the beginning of WWII.