On October 21, 1929, President Hoover traveled to Michigan to take part in the Golden Anniversary of the Festival of Light, organized by Henry Ford to commemorate the invention of the lightbulb by Thomas Edison fifty years earlier. Hoover’s speech was a tribute to progress, and especially to the businessmen and scientists from whose efforts “we gain constantly in better standards of living, more stability of employment... and decreased suffering.” Eight days later, on Black Tuesday, the stock market crashed. As panic selling set in, more than $ro billion in market value (equivalent to more than ten times that amount in today’s money) vanished in five hours. Soon, the United States and, indeed, the entire world found itself in the grip of the Great Depression, the greatest economic disaster in modern history.

The stock market crash did not, by itself, cause the Depression. Even before 1929, signs of economic trouble had become evident. Southern California and Florida experienced frenzied real-estate speculation and then spectacular busts, with banks failing, land remaining undeveloped, and mortgages foreclosed. The highly unequal distribution of income and the prolonged depression in farm regions reduced American purchasing power. Sales of new autos and household consumer goods stagnated after 1926. European demand for American goods also declined, partly because industry there had recovered from wartime destruction.

A fall in the bloated stock market, driven ever higher during the 1920s by speculators, was inevitable. But it came with such severity that it destroyed many of the investment companies that had been created to buy and sell stock, wiping out thousands of investors, and it greatly reduced business and consumer confidence. Around 26,000 businesses failed in 1930. Those that survived cut back on further investment and began laying off workers. The global financial system, which was based on the gold standard, was ill-equipped to deal with the downturn. Germany defaulted on reparations payments to France and Britain, leading these governments to stop repaying debts to American banks. Throughout the industrial world, banks failed as depositors withdrew money, fearful that they could no longer count on the promise to redeem paper money in gold. Millions of families lost their life savings.

Oct. 29—Dies Irae, a 1929 lithograph by James N. Rosenberg, depicts skyscrapers tottering, stockbrokers jumping from windows, and crowds panicking as the stock market crashes. The title means “Day of Wrath.”

Unemployed men, lined up at the New York Municipal Lodging House in 1930. Established in 1909 to provide food and shelter for the homeless, the Lodging House was overwhelmed by the advent of the Great Depression.

Although stocks recovered somewhat in 1930, they soon resumed their relentless downward slide. Between 1929 and 1932, the price of a share of U.S. Steel fell from $262 to $22, and General Motors from $73 to $8. Four-fifths of the Rockefeller family fortune disappeared. William C. Durant, one of the founders of General Motors, lost all his money and ended up running a bowling alley in Flint, Michigan. In 1932, the economy hit rock bottom. Since 1929, the gross national product (the value of all the goods and services in the country) had fallen by one-third, prices by nearly 40 percent, and more than 11 million Americans—25 percent of the labor force— could not find work. U.S. Steel, which had employed 225,000 full-time workers in 1929, had none at the end of 1932, when it was operating at only 12 percent of capacity. Those who retained their jobs confronted reduced hours and dramatically reduced wages. Every industrial economy suffered, but the United States, which had led the way in prosperity in the 1920s, was hit hardest of all.

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