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What Was the Great Depression?
In the fall of 1928, Herbert Hoover, future president of the United States, announced, “We in America today are nearer to the final triumph over poverty than ever before in the history of any land.” Most citizens agreed. Life was the best it had ever been. Only 4 percent of the population was unemployed—four out of every one hundred workers.
A little more than a year later, financial panic had taken over. The New York stock market crashed. Millionaires were ruined. Ordinary citizens lost everything.
The crisis spread from the stock market to the rest of the country. Banks and businesses closed. People’s life savings disappeared. They lost their jobs and their homes. By 1933, one out of every four Americans was out of work. The crisis soon spread all over the world.
This period is called the Great Depression. It remains the worst financial disaster the modern world has ever known. All the money, goods, businesses, and workers that make a country run are called its economy. During the Great Depression, the economy broke down almost completely. To those living through it, it seemed like a bad dream that would not end. What had happened? How did the good times end so quickly?
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