The Great Depression Reading Comprehension Lesson

Reading Passage

The Great Depression

The Great Depression was the worst economic crisis in the history of the modern United States — and one of the most severe economic downturns in world history. It began in the United States in 1929 and lasted through the late 1930s, causing massive unemployment, widespread poverty, bank failures, and agricultural collapse. At its worst, roughly one in four American workers was unemployed. The Depression had profound effects not only on the economy but on politics, culture, and the role of the federal government in American life. Its causes were complex, and its consequences were felt around the world.

The stock market crash of October 1929 — often called ‘Black Tuesday’ (October 29) — is widely seen as the trigger of the Great Depression, though its underlying causes ran deeper. Throughout the 1920s, the U.S. economy had boomed: factories produced enormous quantities of goods, speculation in the stock market ran wild, and many Americans bought stocks on ‘margin’ (borrowing money to invest). When confidence faltered and stock prices began to fall in late October 1929, panic selling caused the market to collapse. Billions of dollars in wealth were wiped out in days. Banks that had invested in the market or made risky loans began to fail; depositors rushed to withdraw their savings, triggering further bank runs. By 1933, over 9,000 American banks had failed.

Unemployment soared from about 3% in 1929 to nearly 25% by 1933. Millions of families lost their homes and savings. Shantytowns of makeshift shacks — sarcastically called ‘Hoovervilles’ after President Herbert Hoover, whom many blamed for the crisis — sprang up on the edges of cities. Soup kitchens and breadlines became fixtures of urban life. In rural areas, a severe drought struck the Great Plains in the early 1930s, combined with decades of over-farming that had stripped away the prairie grasses holding the soil in place. Massive dust storms — creating a region known as the ‘Dust Bowl’ — buried farms and towns in Oklahoma, Texas, Kansas, and surrounding states. Hundreds of thousands of ‘Okies’ (migrants from Oklahoma and neighboring states) piled into cars and headed to California in search of work, an exodus immortalized in John Steinbeck’s novel The Grapes of Wrath.

Franklin D. Roosevelt was elected president in 1932 on a promise of a ‘New Deal’ for Americans. Taking office in March 1933, Roosevelt moved swiftly and boldly. He declared a ‘bank holiday’ (temporarily closing all banks) to stop the bank runs, then pushed for federal deposit insurance (FDIC) to restore public confidence. The New Deal created a vast array of programs and agencies: the Civilian Conservation Corps (CCC) put young men to work in national parks and forests; the Works Progress Administration (WPA) employed millions to build roads, bridges, schools, and public buildings; the Social Security Act (1935) created a retirement income program for elderly Americans. These programs did not end the Depression — unemployment remained high throughout the 1930s — but they provided relief, put people to work, and fundamentally changed the relationship between the federal government and ordinary Americans.

The Great Depression finally ended not through New Deal programs but through the massive government spending of World War II. After Japan attacked Pearl Harbor in December 1941 and the United States entered the war, military production requirements transformed the American economy. Factories that had stood idle converted to making planes, tanks, ships, and weapons. Unemployment virtually disappeared as millions of men joined the military and millions of women entered the workforce. By 1944, the U.S. economy was booming. The lessons of the Depression left a lasting mark on American policy and culture: Social Security, federal bank deposit insurance, the Securities and Exchange Commission (SEC), unemployment insurance, and a more active role for the federal government in managing the economy all emerged from this era and remain central features of American life today.

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