This page features two timelines: The importance of these timelines cannot be emphasized enough. Seeing the order in which events actually occurred dispels many myths about the Great Depression.

One of the greatest of these myths is that government intervention was responsible for its onset. Truly massive intervention began only under the presidency of Franklin Roosevelt in , who was sworn in after the worst had already hit. Although his New Deal did not cure it, all the leading economic indicators improved on his watch. But don't take my word for it -- here is the raw data: TIMELINE OF GENERAL EVENTS s Decade During World War I, federal spending grows three times larger than tax collections.

When the government cuts back spending to balance the budget in , a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity An average of banks fail each year.

Agricultural, energy and coal mining sectors are continually depressed. Textiles, shoes, shipbuilding and railroads continually decline. The value of farmland falls 30 to 40 percent between and Organized labor declines throughout the decade. The United Mine Workers Union will see its membership fall from , in to 75, in The American Federation of Labor would fall from 5. Over the decade, about 1, mergers will swallow up more than 6, previously independent companies; by , only corporations will control over half of all American industry.

By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade. By , the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between and The middle class comprises only 15 to 20 percent of all Americans.

FDIC: Historical Timeline

Individual worker productivity rises an astonishing 43 percent from to But the rewards are being funneled to the top: But that is still less than 1 percent of all income-earners. Calvin Coolidge, who is squeaky clean by comparison, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government.

He announces to the American people: It will decline drastically in , however, after financial and moral scandals rock its leadership. The stock market begins its spectacular rise. Bears little relation to the rest of the economy. Supreme Court rules that trade organizations do not violate anti-trust laws as long as some competition survives. Farmers' share of the national income has dropped from 15 to 9 percent since Between May and September , the average prices of stocks will rise 40 percent.

Trading will mushroom from million shares per day to over 5 million. The boom is largely artificial. Hoover is a staunch individualist but not as committed to laissez-faire ideology as Coolidge.

More than half of all Americans are living below a minimum subsistence level. Backlog of business inventories grows three times larger than the year before.

Worried about a stock market crash? Read this - Feb. 26,

Public consumption markedly down. Freight carloads and manufacturing fall. Automobile sales decline by a third in the nine months before the crash.

Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7. Stock market crash begins October Investors call October 29 "Black Tuesday. Congress passes Agricultural Marketing Act to support farmers until they can get back on their feet. Expands the money supply with a major purchase of U.

However, for the next year and a half, the Fed will add very little money to the shrinking economy. At no time will it actually pull money out of the system. Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.

Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside. The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.

More The first bank panic occurs later this year; a public run on banks results in a wave of bankruptcies. Bank failures and deposit losses are responsible for the contracting money supply.

Supreme Court rules that the monopoly U. Steel does not violate anti-trust laws as long as competition exists, no matter how negligible. Democrats gain in Congressional elections, but still do not have a majority.

The GNP falls 9. The unemployment rate climbs from 3. A second banking panic occurs in the spring. The GNP falls another 8. For , GNP falls a record Industrial stocks have lost 80 percent of their value since Money supply has contracted 31 percent since GNP has also fallen 31 percent since Over 13 million Americans have lost their jobs since Farm prices have fallen 53 percent since International trade has fallen by two-thirds since The Fed makes its first major expansion of the money supply since February Congress creates the Reconstruction Finance Corporation.

More Congress passes the Federal Home Loan Bank Act and the Glass-Steagall Act of More Top tax rate is raised from 25 to 63 percent. Popular opinion considers Hoover's measures too little too late.

Franklin Roosevelt easily defeats Hoover in the fall election. Democrats win control of Congress. At his Democratic presidential nomination, Roosevelt says: More A third banking panic occurs in March. Roosevelt declares a Bank Holiday; closes financial institutions to stop a run on banks. Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.

Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government. The businessmen try to recruit General Smedley Butler, promising him an army of ,, unlimited financial backing and generous media spin control.

The plot is foiled when Butler reports it to Congress. More Congress authorizes creation of the Agricultural Adjustment Administration, the Civilian Conservation Corps, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Emergency Relief Administration, the National Recovery Administration, the Public Works Administration and the Tennessee Valley Authority.

More Congress passes the Emergency Banking Bill, the Glass-Steagall Act of , the Farm Credit Act, the National Industrial Recovery Act and the Truth-in-Securities Act. Roosevelt does much to redistribute wealth from the rich to the poor, but is obsessed with a balanced budget. He later rejects Keynes' advice to begin heavy deficit spending. The free fall of the GNP is significantly slowed; it dips only 2.

Unemployment rises slightly, to More Congress passes the Securities and Exchange Act and the Trade Agreement Act. More The economy turns around: A long road to recovery begins. Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending. More The Supreme Court declares the National Recovery Administration to be unconstitutional.

Congress authorizes creation of the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration. More Congress passes the Banking Act of , the Emergency Relief Appropriation Act, the National Labor Relations Act, and the Social Security Act.

More Economic recovery continues: In response, Congress passes the Soil Conservation and Domestic Allotment Act. More Top tax rate raised to 79 percent. GNP grows a record Germany becomes the second nation to recover fully from the Great Depression, through heavy deficit spending in preparation for war. Roosevelt seeks to enlarge and therefore liberalize the Supreme Court. This attempt not only fails, but outrages the public. Economists attribute economic growth so far to heavy government spending that is somewhat deficit.

Roosevelt, however, fears an unbalanced budget and cuts spending for That summer, the nation plunges into another recession. Despite this, the yearly GNP rises 5. More No major New Deal legislation is passed after this date, due to Roosevelt's weakened political power.

The year-long recession makes itself felt: Britain becomes the third nation to recover as it begins deficit spending in preparation for war.

From to , when the Japanese attack Pearl Harbor, U. The Depression is ending worldwide as nations prepare for the coming hostilities. World War II starts with Hitler's invasion of Poland. Deficit spending has resulted in a national debt percent the size of the GDP. The top tax rate is 91 percent. It will stay at least 88 percent until , when it is lowered to 70 percent.

During this time, America will experience the greatest economic boom it has ever known.

ECONOMIC TIMELINE The following timeline shows the order of economic events during the Great Depression. Notice the effect that deficit spending had on economic growth: Tax receipts as a percentage of the Gross Domestic Product Spending: Federal spending as a percentage of the Gross Domestic Product GNP: Percent change in the Gross National Product Unemp.: As you can see, Roosevelt began relatively modest deficit spending that arrested the slide of the economy and resulted in some astonishing growth numbers.

Roosevelt's average growth of 5. But this only caused the economy to slip back into a recession, as the above chart shows.

And this occurred as deficit spending soared, to levels Keynes had earlier and unsuccessfully recommended to Roosevelt. Summary Return to The Great Depression Homepage Sources: Watkins, The Great Depression: America in the s New York: Little, Brown and Company, Kevin Phillips, Boiling Point New York: HarperCollins, Kevin Phillips, The Politics of Rich and Poor New York: Random House, The Grolier Encyclopedia Entries: New Deal, Depression of the 30s, Roosevelt, Coolidge. The Encyclopedia Brittanica Online Entries: New Deal, Great Depression.

Donald Barlett and James Steele, America: Andrews and McMeel, Donald Barlett and James Steele, America: Who Really Pays the Taxes? The Lion and the Fox New York: Avon Books, Peter Pugh and Chris Garratt, Introducing Keynes Cambridge, England: Norton and Company, Online sources: Stern President, Federal Reserve Bank of Minneapolis , "Achieving Economic Stability: Lessons From the Crash of ," Annual Report Essay, http: