Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 until the late 1930s, marked by significant declines in industrial production, massive unemployment, and widespread poverty. This catastrophic event had profound effects on American society and the economy, leading to landmark legal cases and debates over property rights and state regulations.

5 Must Know Facts For Your Next Test

1. The Great Depression began with the stock market crash on October 29, 1929, known as Black Tuesday, leading to widespread financial panic.
2. Unemployment rates reached as high as 25% in the United States during the height of the Great Depression, with millions of people losing their jobs and homes.
3. The economic crisis prompted significant government intervention in the economy, including the establishment of social safety nets and various regulatory measures.
4. Many landmark Supreme Court cases during this time addressed issues related to economic rights and government powers, influencing the interpretation of the Constitution.
5. The Great Depression led to a shift in public opinion about the role of government in regulating the economy and protecting citizens' welfare.

Review Questions

• How did the Great Depression influence landmark Supreme Court cases regarding economic rights?
  • The Great Depression prompted a series of landmark Supreme Court cases that redefined economic rights and government authority. As unemployment soared and economic hardship spread, cases like *Nebbia v. New York* upheld state regulations on prices and wages to stabilize the economy. The Court's decisions reflected a growing recognition of the need for government intervention in economic matters, marking a shift in judicial philosophy about individual rights versus collective welfare.
• Discuss how property rights were affected during the Great Depression and the legal debates that emerged around them.
  • During the Great Depression, property rights were challenged as many individuals faced foreclosures and evictions due to their inability to pay debts. Legal debates emerged over whether states could impose rent controls or prevent foreclosures as part of emergency measures. Landmark cases often centered on balancing individual property rights against public welfare concerns, leading to new interpretations of what constituted just compensation and protection against arbitrary government action.
• Evaluate the long-term impacts of the Great Depression on American economic policies and constitutional law.
  • The Great Depression had lasting impacts on American economic policies and constitutional law, leading to a more active role for federal government intervention in the economy. The crisis prompted a reevaluation of constitutional principles related to property rights and regulation, resulting in a more flexible interpretation of the Commerce Clause. Additionally, policies established during this time paved the way for modern social welfare systems, shaping future legal frameworks and public expectations regarding government responsibility for economic stability.

Related terms

New Deal: A series of programs and reforms implemented by President Franklin D. Roosevelt in response to the Great Depression, aimed at economic recovery and social reform.

Stock Market Crash of 1929: A major stock market crash that occurred in late October 1929, which was a key event that triggered the Great Depression.

Unemployment Rate: A measure of the percentage of the labor force that is jobless and actively seeking employment, which skyrocketed during the Great Depression.