II- The Ripple Effect

• The stock market crash of 1929 was only the first cause of the Great Depression

• Further economic catastrophes will build on the damage caused by the market crash

A) The Banks Collapse

• 1) Many banks had made risky loans to stock market speculators

• 2) Because the loans would never be paid back, many banks went out of business

• 3) The public panicked and tried to withdraw all of their deposits at one time.

• This is known as a “Run on the Bank”

• 4) Banks did not have the money on hand for the massive withdrawals and went under

• 5) 5,000 bank collapse between 1929 and 1932

B) Unemployment• 1) In 1930 alone,

26,355 business failed due to bad economics

• 2) 25% of all Americans lost their jobs

• 3) With no incomes, millions were evicted and became homeless

• 4) Many families were forced to live in shanty towns built in parks and abandoned buildings.

• 5) These towns became known as “Hoovervilles”, named after President Hoover

• a) Many depended on charity just to survive.• b) Thousands would line up daily for bread

and soup handouts.

C) The Dust Bowl

• 1) In 1932 to 1936 drought struck to Midwest of America.

• 2) The dried up topsoil would be driven by high winds to create storms of dust.

• 3) Dust storms destroyed crops, farms, and even stopped trains from operating.

• 4) Millions of farmers were forced to abandon their farms and go on the road in search of work.