A small merchant in the Bronx went to a branch of the Bank of the United States to dispose of his stock in the institution.
December 1930, New York Times article reporting the event that triggered the Great Depression
DON'T BELIEVE THE HYPE
In 1929, more money is spent on advertising than on education. Six billion dollars worth of goods are bought on credit and over 80% of Americans have no savings at all. Some stocks are valued at 50 times their worth.
When this fact is revealed on 'Black Thursday' in October, panic selling crashes the market.
But only two per cent of the population own stocks and the economy teeters on for another year.
A newspaper article then questions the stability of the Bank of United States. An unknown 'small merchant' decides to dispose of his stock in the bank. The bank refuses him and the fear that the bank has no money spreads like a virus through the city. By the afternoon an estimated 25,000 gather outside the bank. Two million dollars are withdrawn from just one branch but with confidence gone, by the next morning, the bank collapses. The last 60 days of 1930 see on average one bank a day fall. By 1933, there are 28 states without a bank. Industrial production falls by half. Every day 1000 homes are repossessed. The President during this time is Herbert Hoover (1929-1933) and he's blamed for allowing the Great Depression. The unemployed and homeless gather together into shanty towns called Hoovervilles.
Hoover's replaced by Franklin D. Roosevelt. He restores faith in the banking system through federal inspections on 'bank holidays', the results of which he broadcasts on radio to the nation.
I can assure you, my friends that it is safer to keep your money in a reopened bank than it is to keep it under the mattress.
He also creates his New Deal, best known for its series of federal funded public works. In 1936, the largest hydro electric power generation dam, the Boulder or Hoover Dam, opens. A small city had been created around it and it keeps Las Vegas booming. The dam creates America's biggest reservoir and helps California produce more food for America than any other state. Mount Rushmore, sculpted by dynamite, and carved out of rock is also finished. Ten extra centimetres are left on the faces of the four American presidents depicted. This factors in erosion and means that the carved heads will be at their ideal shape for viewing in 30,000 years. It's a statement of American confidence in its own future.
But by 1936, one in six workers is still out of a job. What brings America out of the Depression isn't the New Deal, but World War II. And once again, it's Roosevelt that has to face this new challenge. Like 400,000 other Americans, he won't survive it. But when it's over, a broken country will emerge as the world's greatest superpower.
Did you know?
Drying concrete gives out heat and if the Hoover Dam had been completed in a single pour it would generate enough heat to have baked half a million loaves of bread every day for three years, and have taken 125 years to harden. The solution was to use the ice cold water from the river they were damming to cool the concrete., On top of financial collapse, farmers had to deal with exhausted top soil being sucked up into dust storms in 1934, the worst environmental disaster in American history. The Great Plains became a Dust Bowl and the storms meant street lights came on at midday in New York and Chicago. Dust storms moved at 100km an hour and could be 300km wide. People would tie themselves to ropes just before going to the barn in case they were whipped away.