The American economy entered an normal recession throughout the summer of 1929, as consumer expenditure dropped and unsold goods began to pile up, slowing production. At the same time, stock prices continuous to rise, and by the fall of that year had accomplished levels that could not be acceptable by anticipated future earnings.
On October 24, 1929, the stock market bubble lastly burst, as investors began discarding shares en masse. A record 12.9 million shares be traded that day, known as "Black Thursday." Five days later, on "Black Tuesday" some 16 million shares were deal after another gesture of horror swept Wall Street. Millions of shares ended up valueless, and those investors who had bought stocks "on margin" (with borrowed money) were clean out completely.
Despite declaration from President Herbert Hoover and other leaders that the disaster would run its course, matters sustained to get worse over the next three years. By 1930, 4 million Americans appear for work could not find it; that number had risen to 6 million in 1931. Meanwhile, the country's industrial manufacture had dropped by partially.
Bread lines, soup kitchens and increasing numbers of destitute people became more and more ordinary in America's towns and cities. Farmers (who had been harassed with their own economic despair for much of the 1920s due to drought and falling food prices) couldn't afford to yield their crops, and were forced to leave them decomposing in the fields whereas people elsewhere hungry.
Hoover, a Republican who had previously served as U.S. secretary of commerce, supposed that government should not straight intervene in the economy, and that it did not have the liability to create jobs or provide economic release for its citizens. In 1932, however, with the country mired in the pits of the Great Depression and some 13-15 million people (or more than 20 percent of the U.S. populace at the time) unemployed, Democrat Franklin D. Roosevelt won an irresistible triumph in the presidential election.