The stock market crash of 1929 caused the Great Depression. But 1929 was hardly the first time the United States had experienced an economic collapse. There had been previous ones in 1819, 1837, 1857, 1873, 1884, 1890, 1896, 1901, 1907, and 1910. You’d think people would been used to them by 1929.
Was the 1929 Depression really worse than all previous depressions? If so, were there fundamental differences from previous depressions or was it just the worst one on the list? Or was it just a case that the 1929 crash received more publicity and was more recent in memory?
Back when encylopedia on paper were the primary means of collecting and dessiminating information, we had World Book Encylopedia. In the article on the Depression, it had a graph showing the length and depth of periods of economic depression in the U.S. The Great Depression was a huge red stain, both for the length of time it lasted and the severity. The other depressions mentioned in the OP showed up on the graph, but they weren’t nearly as prolonged or as severe.
Previous “panics” had mostly meant a stock market crash and a two or three year slump afterwards. The Great Depression lasted ten years and was a near-collapse of the entire market economy. People seriously thought that it might be the end of capitalism. It might have lasted even longer if WW2 hadn’t artificially boosted the economy.
Yes, it really was the worst, in every possible measure.
It was paired with some of the worst weather of the century. The Dust Bowl is not comprehensible until you start studying it. One statistic: In Haskell County, Kansas, farmers harvested more than 3.4 million bushels of wheat in 1931. They produced only 89,000 bushels in 1933.
And it was a worldwide depression, so the U.S. couldn’t get help by increasing exports to nations doing better than it was.
You’d have to write a 10,000 word post to really do justice to why this depression was so much worse than the previous downturns and I’d rather tell you to go a read a book on the subject. John A. Garraty’s The Great Depression is a good introduction precisely because of its international perspective. When you get done reading how incredibly bad off the whole world was in the 1930s, WWII seems a lot less mysterious. But there are hundreds of books that concentrate on just the U.S.
You can’t understand the second half of the century without understanding how damaging the Depression was to the “national psyche.” Everything was a reaction to make sure that we never went though that again.
Yes, the Great Depression was BY FAR the worst economic calamity in American history.
Consider the change in real per capita GDP, peak to trough, in various “panics” and recessions:
1837-43: down 3%
1857: down 2%
1873-75: down 4%
1893-94: down 13%
1907: down 12%
1929-33: down 29%
In terms of duration, economic historians divide the GD into a contraction from 1929 until 1933, an expansion from 1933 until 1937, and a second contraction from 1937 until 1938, after which expansion resumed and carried through World War II. The first four-year contraction is probably the longest in American history. If you look at an old textbook it may show 1873-79 as a single contraction (albeit much milder than the GD), but with better economic data I believe this view is no longer held.
In any case, the more useful measure is how long it takes the economy to re-attain its post-crash peak (measured by real per capita GDP). In the GD it took ten years (1929-39); in no other panic did it require more than five.
I also think the Great Depression was bad, but it depended a lot upon whether you had a steady job. In the period 1930-1939, prices dropped. So if you were lucky enough to have a salaried job, your dollars were worth more and more. If you didn’t, times wer indeed tough, because wages dropped (ifwork was obtainable). Both sets of my grandparents went through the Depression; my father’s father was a stonecutter-and his work dried up (no buildings were built in Boston from 1932 till 1955! His income drastically declined-but he at least owned his house. My father experienced many hardships, but they always had a home. My maternal gradfather was luckier-he was manager of an A&P grocery store-and their income was sufficient to live on. My grandmother also told me of her many times feeding unemployed men who came to the door; so times were pretty bad.
My Dad was a teenager, born in '15 and they lived outside a small town in NE Ohio. He wasn’t fond of chicken all his life, he said they ate chicken 7 days a week during the hard times. They could raise chickens very cheaply. They lived near a RR track, he and his younger brother used to walk down the track a couple of miles to a grade, they’d jump the train as it slowed. They had a couple of gunny sacks that they filled w/ coal and throw off, then they would jump off, walk back to retrieve the sacks. His father worked for the B&O RR, but he got “furloughed” much of the time (fancy name they used for lay-offs).
And remember that the percentage of workers who didn’t have a job during the Depression was astronomically high compared to typical unemployment rates: over 20% for years at a time. This article notes (emphasis added):
I have read books about it. But the problem is that virtually every book on the subject treats the Great Depression as if it was a unique event. I’ve never seen any book that compares it with previous economic crises.
So I was wondering if it really was that much worse than past economic collapses or it just happened during a time when there was more media. To give an analogy, if you read a lot of what is written or said about the Vietnam War, you’d come away with the impression it was one of the biggest wars in human history.
Actually, it could have (and maybe should have) been a lot worse. The farm economy had started to go sour in the early 1920s, Germany had defaulted on their war reparations, which dragged down England and France – so Europe was in bad shape. By late 1923, the German mark had dropped to 4.2 trillion (trillion – as in 12 zeros!) to the dollar.
The U.S. was lucky to make it to 1929 before the big crash.
The Great Depression was a unique event. No other previous recession or panic compared to it. Again, that’s partly because it was a worldwide event and partly because it lasted so long and partly because it affected every sector of the society from farmers to bankers and partly because it was in a truly modern economy, unlike the less fully industrialized economies of the world before WWI. There’s nothing to compare to it unless you’re a specialist in political economy.
Assuming you weren’t asked to take a wage cut. Many people had to. In addition, job security was nonexistant; not only was there a strong chance that you’d show up and discover your workplace had bone under, but there were also so many unemployed people that if you crossed your employer he could replace you with someone the next day – and pay him less.