The Great Depression
The Great Depression was a major economic depression proceeding WWII. This depression was the most widespread and deepest depression in the 20th century. Now a days the great depression is commonly used as an example of how far the world's economy can decline. The depression happened after the fall of the stock market prices; September 4, 1929. This also became known as the stock market crash. During the great depression the farmers suffered the most, because prices were dropping fast especially on crops. Some examples of what happened with the economy was tax revenue, personal income, prices dropping, and profits. People and places everywhere were hit hard with this, especially the ones who were dependent on heavy industry. Many were out of were very desperate for jobs during this time. They were unable to find their own job in town so they left. These people would travel from place to place constantly and usually by foot. Some of them had cars but most of them hitchhiked or "rode the rails". Most of the people who "rode the rails" were teenagers, but sometimes older men, women, and even whole families traveled like this. Usually they would board freight trains and go across the country, hoping to find new jobs on their journey. When and if there was a job opening, people went crazy. Literally thousands of people would apply and if they were lucky enough to get the job, they would live in Shantytown (known as "Hoovervilles") outside of town. These houses were made out of any loose material they could up such as cardboard, driftwood, even newspapers. When farmers lost their land and homes they usually headed toward California, because of hearing rumors of agriculture jobs that way. There was some seasonal work, but unfortunately the conditions were not very good for families. Many of these families were from Arkansas or Oklahoma so they were called "Okies" and "Arkies".
5 Top Causes Of The Great Depression
1. Stock Market Crash of 1929:
Many truly believe that the stock market crash that happened on "Black Tuesday" October 29. 1929 is one of the major causes to the great depression. Two months after the crash happened stockholders had lost more than $40 billion. Although it began to regain some of its losses by the end of 1930, it was just not enough and America truly entered a time called The Great Depression.
2. Bank Failures:
Throughout the 1930s over 9,000 banks failed. Deposits were uninsured and as banks continued to fail people just lost their savings. Surviving banks stopped being so willing to create new loans because they were more worried about their own survival and unsure of the economic situation. This terrible rime led to less and less expenditures.
3. Reduction in Purchasing Across the Board:
With the stock market crash just happening and the fears of worse economic situations, people from all classes stopped purchasing items. This led to reduction in the number of items produced and then a in the wokforce. People kept losing their jobs and this meant they were unable to keep up with the paying for items they had already purchased so their items were repossessed. More and more inventory came. The unemployment rate rose over 25% and of course this led to even less spending to help, yet another, economic situation.
4. American Policy with Europe:
Yet again businesses began failing so the government made the "Smoot-Hawley Tariff" in 1930 to help protect the American companies. This charged a high tax for imports that led to less trade between America and foreign countries and, surprise, surprise; more economic problems.
5. Drought Conditions:
This was not one of the main causes of the great depression but, it did have and effect. This drought occurred in the Mississippi Valley in 1930. Many people could not pay their taxes or other debts and they had to sell their farms for no profit to themselves because of it. The area was nicknamed "The Dust Bowl".
Many truly believe that the stock market crash that happened on "Black Tuesday" October 29. 1929 is one of the major causes to the great depression. Two months after the crash happened stockholders had lost more than $40 billion. Although it began to regain some of its losses by the end of 1930, it was just not enough and America truly entered a time called The Great Depression.
2. Bank Failures:
Throughout the 1930s over 9,000 banks failed. Deposits were uninsured and as banks continued to fail people just lost their savings. Surviving banks stopped being so willing to create new loans because they were more worried about their own survival and unsure of the economic situation. This terrible rime led to less and less expenditures.
3. Reduction in Purchasing Across the Board:
With the stock market crash just happening and the fears of worse economic situations, people from all classes stopped purchasing items. This led to reduction in the number of items produced and then a in the wokforce. People kept losing their jobs and this meant they were unable to keep up with the paying for items they had already purchased so their items were repossessed. More and more inventory came. The unemployment rate rose over 25% and of course this led to even less spending to help, yet another, economic situation.
4. American Policy with Europe:
Yet again businesses began failing so the government made the "Smoot-Hawley Tariff" in 1930 to help protect the American companies. This charged a high tax for imports that led to less trade between America and foreign countries and, surprise, surprise; more economic problems.
5. Drought Conditions:
This was not one of the main causes of the great depression but, it did have and effect. This drought occurred in the Mississippi Valley in 1930. Many people could not pay their taxes or other debts and they had to sell their farms for no profit to themselves because of it. The area was nicknamed "The Dust Bowl".
Resources:
"Great Depression - Wikipedia, the free encyclopedia." 2003. 23 Oct. 2012 <http://en.wikipedia.org/wiki/Great_Depression>
"Great Depression - A Short History of the Great Depression." 2009. 26 Oct. 2012
<http://history1900s.about.com/od/1930s/p/greatdepression.htm>
Martin Kelly. "Great Depression - Top Five Causes of the Great Depression." 2007. 24 Oct. 2012
<http://americanhistory.about.com/od/greatdepression/tp/
"Great Depression - A Short History of the Great Depression." 2009. 26 Oct. 2012
<http://history1900s.about.com/od/1930s/p/greatdepression.htm>
Martin Kelly. "Great Depression - Top Five Causes of the Great Depression." 2007. 24 Oct. 2012
<http://americanhistory.about.com/od/greatdepression/tp/