The Great Depression was the worst economic crisis in modern history, lasting from until the beginning of World War II in The causes of the Great Depression included slowing consumer demand, mounting consumer debt, decreased industrial production and the rapid and reckless expansion of the U. When the stock market crashed in October , it triggered a crisis in the international economy, which was linked via the gold standard.
A rash of bank failures followed in , and as the Dust Bowl increased the number of farm foreclosures, unemployment topped 20 percent by Presidents Herbert Hoover and Franklin D. Throughout the s, the U. The stock market, centered at the New York Stock Exchange on Wall Street in New York City , was the scene of reckless speculation, where everyone from millionaire tycoons to cooks and janitors poured their savings into stocks.
As a result, the stock market underwent rapid expansion, reaching its peak in August By then, production had already declined and unemployment had risen, leaving stock prices much higher than their actual value.
Additionally, wages at that time were low, consumer debt was proliferating, the agricultural sector of the economy was struggling due to drought and falling food prices and banks had an excess of large loans that could not be liquidated.
The American economy entered a mild recession during the summer of , as consumer spending slowed and unsold goods began to pile up, which in turn slowed factory production. Nonetheless, stock prices continued to rise, and by the fall of that year had reached stratospheric levels that could not be justified by expected future earnings. On October 24, , as nervous investors began selling overpriced shares en masse, the stock market crash that some had feared happened at last.
