The Great Depression was a dramatic, worldwide economic downturn.

The
beginning of the Great Depression in the United States is associated with the
stock market crash on October 29, 1929. The stock market crash, better
known as “Black Tuesday” had devastating effects on industrialized
countries. International trade declined sharply, as did personal incomes, tax
revenues, prices, and profits. Cities all around the world were hit hard,
especially those dependent on heavy industry. At the time, Herbert Hoover
was President of the United States. The cause of the Great Depression is
currently argued by three different theories about the failure of free markets.
The first of the three focuses on the macroeconomic effects of money supply
and the supply of gold which backed many currencies before the Great
Depression, including production and consumption. The second theory
focuses more on institutional economics, that point to under consumption
and economic bubbles, wrongdoing by bankers and industrialists or
incompetent government officials. The last theory focuses on the fact that
the central government continuously contradicts itself. The economic impact
of the Great Depression affected other countries like Australia, Canada,
France, Germany, Latin America, Netherlands, South Africa, the Soviet Union,
and the United Kingdom. The great depression caused unemployment rates
to rise and caused instability in all countries.
 Timeline

1920s: During World War I, federal spending grows three times larger than
tax collections. At least an average of 600 banks fails each year. Organized
labor declines throughout the decade.

1922: The conservative Supreme Court strikes down federal child labor
legislation.

1923: President Warren Harding dies in office resulting in Calvin Coolidge

becoming the next president. Supreme Court also nullifies minimum wage for
women in District of Columbia.

1924: The stock market begins its spectacular rise.

1925: The top tax rate is lowered to 25 percent.

1928: The average prices of stocks rose 40 percent. The boom is largely
artificial.

1929: Herbert Hoover becomes President.

August 1929: Recession begins in August, two months before the stock
market crash.

October 1929: Stock market crashes.

1930: The Federal Reserve has cut the prime interest rate from 6 to 4
percent. The Smoot-Hawley Tariff passes on June making imports forming
only 6 percent of the GNP.

1931: The GNP falls another 8.5 percent while unemployment rises to 15.9
percent.

1932: International stocks lost 60 percent of their value and tax rates are
raised from 25 to 63 percent.

1933: President Franklin Roosevelt defeats Hoover in reelection and is

inaugurated.
1934: The economy turns around: GNP rises 7.7 percent, and unemployment
falls to 21.7 percent. A long road to recovery begins.