In the 1930s the United States went into a severe economic state.
Causes of the Great Depression People over speculated on stock and the market crashed – people bought lots of stocks using borrowed money that they could not repay when the market crashed The Federal Reserve System failed to prevent the collapse of the banking system World-wide depression which lead to high tariffs (tax on goods coming from other countries).High tariffs discouraged international trade. Surplus of goods (too many products available and not enough buyers)
1920s American Spending Between 1925 and 1929, Americans borrowed money and purchased more stock.
Banks Close There was a run on banks because people tried to get their money out. Banks closed because there was no money to give to people because money was uninsured and banks were not regulated well.
Value of Stocks The stock market crash hurt many Americans because their stocks became worthless.
What is life like during the Great Depression? High unemployment: One quarter or 25% of people lose their jobs A large number of people become homeless and hungry A large number of banks and businesses failed Farmers’ incomes fell to low levels
Businesses Businesses failed during the Depression because: Banks asked for repayment of loans Customers became unemployed and could not purchase consumer goods Banks foreclosed on many businesses
Farmers Even before the Great Depression farmers faced economic hard times. Farmers would face the hardest economic times during the Depression.
Dust Bowl The southern Great Plains suffered an environmental disaster and became known as the Dust Bowl Causes were drought, overgrazing, and overplowing. As a result, massive dust storms called “black blizzards” continued for years. Thousands of Dust Bowl farmers went bankrupt and lost their farms. Many migrated to California.
Where could a person or family get aid during the Great Depression?
President Hoover’s Response President Hoover believed that the Great Depression was only temporary and that prosperity was “just around the corner.” Hoover’s refusal to provide funds for the unemployed during the Depression was based on the belief that private companies and volunteers should provide for the unemployed. Shacks were called Hoovervilles to show Hoover’s failure.
Where did people live during the Great Depression?