The Wall Street stock market crashed in October 1929, the world
economy was plunged into the Great Depression. By the winter of 1932,
America was in the depths of the greatest economic depression in its
The number of unemployed
people reached upwards of 13
America had lent huge sums of money
to European countries. When the stock
market collapsed, they suddenly recalled
those loans. This had a devastating
impact on the European economy.
Republican President Herbert
Hoover was personally blamed for
failing to deal with the
consequences of the Wall Street
The American economy did not fully recover
until the USA entered the Second World War
in December 1941.
Franklin D Roosevelt promised, "A new deal
for the American people."
The New Deal
At the start of 1934 there was still 11.3 million
people out of work
Failed to deal with
Created Alphabet Agencies
Roosevelt restored confidence in the
American people. Millions of people were
given work in government projects. A lot
of valuable work was carried out by the
in building schools, roads and hospitals.
Roosevelt rescued the banking system
from collapse and saved capitalism
There was a new recession - the
'Roosevelt recession' in 1937.
Unemployment was not conquered by
the New Deal. Many of the jobs created
by the New Deal were only temporary.
The New Deal was the most costly
government programme in American
History and some of its projects could
be accused of wasting money.
13 to 15 million Americans were unemployed and nearly half
of the country’s banks had failed.
Matters continued to get worse over the
next three years. By 1930, 4 million
Americans looking for work could not find it;
that number had risen to 6 million in 1931.
Tennessee Valley Authority (TVA), which built
dams and hydroelectric projects to control
flooding and provide electric power to the
impoverished Tennessee Valley region of the
Works Project Administration (WPA), a
permanent jobs program that employed
8.5 million people from 1935 to 1943.
In 1935, Congress passed the Social
Security Act, which for the first time
provided Americans with
unemployment, disability and
pensions for old age.
When the Great Depression began, the United States was the
only industrialized country in the world without some form of
unemployment insurance or social security.
After showing early signs of recovery
beginning in the spring of 1933, the
economy continued to improve
throughout the next three years,
during which real GDP (adjusted for
inflation) grew at an average rate of 9
percent per year.