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Introduction
Th e Great Depression remains a seminal event in U.S. history, one of only
a few historical occasions when the economy completely failed and Ameri-
cans’ legendary confi dence went dormant. When the stock market crashed
in October 1929 and the economy settled into the Great Depression, Amer-
ican optimism, for a short time at least, cratered as well. Th e event was the
worst economic crisis ever to hit the industrialized Western world.
Th e roots of the Great Depression lie in the aft ermath of World War I,
which disrupted trade, exchange rates, and the fl ow of capital. Domestically,
the laissez-faire economic model did little to address the unproductive cli-
mate. Farmers in the Midwest were also suff ering from economic diffi cul-
ties. European farmers had increased production aft er the war, fl ooding the
international agricultural market and making it more diffi cult for farmers
in the United States to break even. Th is was particularly damaging since
agricultural production employed almost one-fi ft h of the American work-
force. Th e Smoot-Hawley Tariff Act of 1930 raised tariff s on imported ag-
ricultural goods in an eff ort to create a more favorable economic climate
for farmers but resulted in increased taxation on American products sold
in Europe, further restricting trade. An outdated, inadequately regulated
network of private banks and minimal government spending would off er
little protection against the impending crisis.
Despite these factors, few could have predicted the suddenness and
depth of the catastrophe. Th e stock market in the United States had under-
gone unprecedented, consistent growth in the 1920s, prompting increased
investing, borrowing, and buying on credit. U.S. Treasury securities were
removed from money market accounts and rerouted to Wall Street. Corpo-
rations invested more working capital in the stock market, as did middle-
class Americans, who withdrew money from their bank accounts to buy
stocks. When the Dow plummeted in October 1929, Wall Street was sent
into a panic, wiping out thousands of investors. Billions of dollars were
