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The economic depression that fell upon the United States in the 1930s had devastating effects on the country. At the depth of the depression, in 1933, one American worker in every four was out of a job. The great industrial slump continued throughout the 1930s, shaking the foundations of Western capitalism.

Despite the seeming business prosperity of the 1920s, however, there were serious economic weak spots, a chief one being a depression in agriculture. Also depressed were such industries as coal mining, railroads, and textiles. Throughout the 1920s, U.S. banks had failed averaging of 600 a year along with thousands of other business firms. By 1928 the construction boom was over.

The U.S. stock-market crash that occurred in October 1929, with huge losses, marked

the beginning of, the most traumatic economic period of modern times. By 1930 the slump was apparent, but few people expected it to persist; previous financial panics and depressions had reversed in a year or two. The usual forces of economic expansion had vanished, however. Technology had eliminated more industrial jobs than it had created; the supply of goods continued to exceed demand; the world market system was basically crumbling. As business failures increased and unemployment soared and as people with dwindling incomes nonetheless had to pay their creditors, it was apparent that the United States was in the grip of economic breakdown.

The stark statistics scarcely convey the distress of the millions who lost jobs, savings, and homes. From 1930 to 1933 industrial stocks lost 80 percent of their value. In the four years from 1929 to 1932 approximately 11,000 U.S. banks failed (44 percent of the 1929 total), and about $2 billion in deposits evaporated. The gross national product, which for years had grown at an average annual rate of 3.5 percent, declined at a rate of over 10 percent annually, on average, from 1929 to...