DEPRESSION'S DEPTHS?

The Great Depression was a worldwide economic downturn that started in 1929 and ended around 1939. It was the largest economic depression in modern history, and is now used as a benchmark on how far the world's economy can fall. The Great Depression originated in the United States with the stock market crash of October 29, 1929, commonly known as Black Tuesday. International trade was deeply affected, as were personal income, tax revenues, prices and profits. In all, 9,000 banks failed during the 1930s. By 1933, depositors had lost $140 billion in deposits.

In 1933, President Franklin D. Roosevelt created the New Deal programs which stimulated demand and provided work and relief for the poor through increased government spending and financial reforms. The Works Progress Administration (WPA) , which was the largest agency of the New Deal program, was authorized to put people back to work on public projects. Several New Deal programs remain active, with some still operating under their original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security Administration (SSA) and Securities and Exchange Commission (SEC).

The following measures were also taken to ensure better financial protection:

• The Securities Act of 1933 regulated the securities industry.
• The Securities Exchange Act of 1934 created the SEC.
• The FDIC federally insured bank deposits.
• The National Recovery Administration (NRA) instituted regulations to fight deflationary "cut-throat competition" until it was deemed unconstitutional by the U.S. Supreme Court (178) in 1935.
• The Agricultural Adjustment Act (AAA) cut farm production to raise prices through subsidies to voluntary cutbacks in production.

By 1940, the economy recovered and the banks became more profitable. The U.S. entered World War II in 1941. Between 1941 and 1945, the Gross National Product (GNP) grew by more than 75 percent, and the U.S. government had taken the lead on the economy.

Additional Resources:

• History of the FDIC
• New Deal Programs: Selected Library of Congress Resources
• The Great Depression and the New Deal - Photographs
• America from the Great Depression to World War II - Photographs
• U.S. Financial Crisis 
• Latest Statistics on the Economy
• Federal Reserve System
• Mortgage Forgiveness Debt Relief Act of 2007
• Treasury Securities
• Failed Banks