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Home Building & Loan Association v. Blaisdell

The Great Depression

The Great Depression was a period of U.S. and worldwide economic depression during the 1930s, characterized by failing businesses, rampant unemployment, and decreased prices for agricultural products. The Great Depression began with the stock market crash of 1929 and lasted for roughly a decade--the longest depression experienced by industrialized nations. Due to decreasing value of assets caused by the stock market crash, many banks failed. In 1933 11,000 out of 25,000 of the banks in the United States went out of business.

Prior to the Great Depression it was uncommon for governments to intervene in free market economies because of the widely held belief that a capitalist economy had the inherent ability to stabilize itself. President Roosevelt introduced a series of legislative proposals know as New Deal including public works programs, the Emergency Banking Act, and the FDIC legislation to counteract the effects of the Depression. This radically changed the complexion of the U.S. economy. As a result of the Depression the federal government began intervening in economic affairs to previously unheard of proportions. Ironically, it was not until the outbreak of World War II, which caused an increase in demand for production and new jobs, that the U.S. and world economies began to stabilize.

Additional topics

Law Library - American Law and Legal InformationNotable Trials and Court Cases - 1918 to 1940Home Building Loan Association v. Blaisdell - Significance, Supreme Court Finds That The Contract Clause Is Not Absolute, Size Of The Supreme Court