1928 * The construction boom is over. * Farmers' share of the national income has dropped from 15 to 9 percent since 1920. * Between May 1928 and September 1929, the average prices of stocks will rise 40 percent. Trading will mushroom from 2-3 million shares per day to over 5 million. The boom is largely artificial. 1929 * Herbert Hoover becomes President. 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. * Annual per-capita income is $750; for farm people, it is only $273. * Backlog of business inventories grows three times larger than the year before. Public consumption markedly down. * Freight carloads and manufacturing fall. * Automobile sales decline by a third in the nine months before the crash. * Construction down $2 billion since 1926. * 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 7.5 percent, and personal income at 5 percent. * Stock market crash begins October 24. Investors call October 29 "Black Tuesday." Losses for the month will total $16 billion, an astronomical sum in those days. * Congress passes Agricultural Marketing Act to support farmers until they can get back on their feet. 1930 * By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Expands the money supply with a major purchase of U.S. securities. 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: "Liquidate labor, liquidate stocks, liquidate real estate⦠values will be adjusted, and enterprising people will pick up the wreck from less-competent people." (More) * The Smoot-Hawley Tariff passes on June 17. With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.4 percent per citizen. 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.S., but a major one in Europe. (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.S. 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 9.4 percent from the year before. The unemployment rate climbs from 3.2 to 8.7 percent. 1931 * No major legislation is passed addressing the Depression. * A second banking panic occurs in the spring. * The GNP falls another 8.5 percent; unemployment rises to 15.9 percent. 1932 * This and the next year are the worst years of the Great Depression. For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6 percent. * Industrial stocks have lost 80 percent of their value since 1930. * 10,000 banks have failed since 1929, or 40 percent of the 1929 total. * About $2 billion in deposits have been lost since 1929. * Money supply has contracted 31 percent since 1929. * GNP has also fallen 31 percent since 1929. * Over 13 million Americans have lost their jobs since 1929. * Capital growth investments have dropped from $16.2 billion to 1/3 of one billion since 1929. * Farm prices have fallen 53 percent since 1929. * International trade has fallen by two-thirds since 1929. * The Fed makes its first major expansion of the money supply since February 1930. * Congress creates the Reconstruction Finance Corporation. (More) * Congress passes the Federal Home Loan Bank Act and the Glass-Steagall Act of 1932. (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: "I pledge you, I pledge myself, to a new deal for the American people."