The Great Depression in USA

By Garne
  • Period: to

    The Great Depression

  • U.S. decline in industrial production

  • The Recession begins

    The Recession begins, two months before the crash.
    Production falls by 20 %.

  • The Stock market crash begins

  • "Black Tuesday"

    The U.S. stock market collapse

  • Decline in the commodity prices

    The stock market crash had little substantive effect on the recession because only 16% of the population was involved in the market, and only 10% of wealth was lost. However, the crash created uncertainly in people’s minds about the future of the economy. This distrust in future income reduced consumption expenditure. As demand for commodities decreased, so did their prices

  • Smoot-Hawley Tariff act passed

    The Tariff Act of 1930, otherwise known as the Smoot-Hawley Tariff or Hawley-Smoot Tariff, was an act that raised U.S. tariffs on over 20,000 imported goods to record levels.
    The overall level tariffs under the Tariff were the second-highest in U.S. history, exceeded by a small margin only by the Tariff of 1828. The act, and the ensuing retaliatory tariffs by U.S. trading partners, reduced American exports and imports by more than half.

  • First U.S. bank failures

    Between 1929 and 1933 40% of all banks in the United States (9.490 out of 23.697 banks) went bankrupt.

  • Second U.S. bank failures

    If people expect the deflation to continue, they anticipate that prices will be even lower in the future than they are now. They hold off on purchases to take advantage of the expected lower prices. They are reluctant to borrow at any nominal interest rate because they will have to pay back the loan in dollars that are worth more when prices are lower than they are now. In short, the real interest rate rises above the nominal rate.

  • Goverment conducted open market transactions

    April - June: Government conducted open market transactions to increase money supply.

  • Franklin D. Roosevelt elected President

    Frankling D. Roosevelt elected as the 32nd president of the United States.

  • the 1993 Economy Act

    The Economy Act, a part of the first "new deal", was passed on March 14, 1933. The act proposed to balance the "regular" (non-emergency) federal budget by cutting the salaries of government employees and cutting pensions to veterans by fifteen percent. It saved $500 million per year.

  • Emergency Banking Act signed into law

    On March 9 1933 the act Emergency Banking Act was passed and signed into law. It provided for a system of reopening banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in hoarded currency and gold flowed back into them within a month, thus stabilizing the banking system. By the end of 1933, 4004 small local banks were closed and merged into larger banks .

  • Executive Order 6102 signed

    Executive order 6012by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates" by U.S. citizens. Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933 all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Violation of the order was punishable by fine up to $10,000 or up to ten years in prison, or both.

  • 500 tonnes gold turned in

    In 1933 approximately 500 tonnes of gold were turned in to the Treasury at the exchange rate of $20.67 per troy ounce. The price of gold from the treasury for international transactions was thereafter raised to $35 an ounce. The resulting profit that the government realized funded the Exchange Stabilization Fund established by the Gold Reserve Act in 1934.
    US goes off the gold standard for US currency. Gold continues to be used to settle international debts.

  • The National Labor Relations Act

    The National Labor Relations Act of 1935, also known as the Wagner Act, finally guaranteed workers the rights to collective bargaining through unions of their own choice. The Act also established the National Labor Relations Board (NLRB) to facilitate wage agreements and to suppress the repeated labor disturbances. The Wagner Act totally did not compel employers to reach agreement with their employees. But it opened possibilities for American labor.

  • The Fair Labor Standards Act

    The Fair Labor Standards Act of 1938 set maximum hours (44 per week) and minimum wages (25 cents per hour) for most categories of workers. Child labour of children under the age of 16 was forbidden, children under 18 years were forbidden to work in hazardous employment. As a result the wages of 300,000 people were increased and the hours of 1.3 million were reduced.