TOPIC: The Great Depression Causes of the Great Depression 1. Weaknesses in the overall economy

! farmers suffered from declining prices and increased debt

! unemployment plagued the railroad, coal and cotton and woolen textile industries

o affected by trucking, electricity and changing fashions

! overproduction of goods lead to a surplus of inventory

o demand for goods slows

2. Unequal distribution of wealth

! 1% of the population controlled 60% of the nation’s wealth

! 40% of Americans lived below the poverty line ($1,500/year)

! 27,000 wealthiest family’s income = 11 million poorest

3. Easy credit

! Americans are buying consumer goods on credit and installment plans

o “buy now, pay later”

! when the economy fails they are unable to pay off their debt

4. Unbalanced foreign trade

! US tariffs and weak European economy limits trade with US

! foreign nations are unable to buy US goods or repay loans

5. Stock Market Crash of 1929

! stock market had record growth throughout the 1920s

! most stocks bought on margin (credit)

! “Black Tuesday” (Oct. 29, 1929) : panic selling triggers the crash of the stock market and the Great Depression

Watch this video for a recap: Causes of the Great Depression

What was life like during the Great Depression? TASK: Read through the stations to determine what life was like during the Great Depression. You will use the information learned to complete Assignment #1.

STATION 1

The Depression in the Cities In cities across the country, people lost their jobs, were evicted from their homes and ended up in the streets. Some slept in parks or sewer pipes, wrapping themselves in newspapers to fend off the cold. Others built makeshift shacks out of scrap metals. Before long, numerous shantytowns- little towns consisting of shacks sprang up. An observer recalled one such settlement in Oklahoma City: “Here were all these people living in old, rusted-out car bodies…There were people living in shacks made out of orange crates. One family with a while lot of kids were living in a piano box…People were living in whatever they could junk together.” Every day the poor dug through garbage cans or begged. Soup kitchens offering free or low cost food and bread-lines, or lines of people waiting to receive food provided by charitable organization or public agencies became and common site. One man described a bread-line in New York City “Two or three blocks along Times Square, you’d see these men, silent, shuffling along in line. Getting their handout of coffee and doughnuts, dealt out from great trucks…I’d see that flat opaque expressionless look which spelled, for me, human disaster. Men…who has lost responsible positions. Who had lost their jobs, lost their homes, lost their families…They were destroyed men.” Conditions for African Americans and Latinos were especially difficult. Their unemployment rates were higher and they were the lowest paid. They also dealt with increasing racial violence from unemployed whited competing for the same jobs. Twenty-four African Americans died by lynching in 1933. Latinos- mainly Mexicans and Mexican Americans living in the Southwest- were also targets. Whites demanded that Latinos be deported, or expelled from the country, even though many had been born in America. By the late 1930’s, hundreds of thousands of people of Mexican descent were relocated to Mexico. Some left voluntarily; others were deported by the Federal Government.

STATION 2

CARTOON #1

STATION 3

Year Number of Bank Suspensions

Unemployment Rate

Per Capita Personal Income

Real GDP (in millions of dollars)

1929 659 3.2% $698 $951.7

1930 1352 8.9% $619 $862.1

1931 2294 16.3% $526 $788.8

1932 1456 24.1% $399 $682.9

1933 4004 25.2% $372 $668.9 Data; St Louis Federal Reserve Bank

! Bank Suspensions: Includes all banks closed to the public, either temporarily or permanently, by supervising authorities or by the bank’s boards of directors because the bank is having financial difficulties.

! Unemployment Rate: The unemployment rate is the percentage of the labor force that is willing and able to work, does not currently have a job, and is actively looking for employment. The labor force consists of people ages 16 and over who are employed or actively seeking work.

! Per Capita Personal Income: Per capita personal income is the average annual income per person.

! Real GDP: Gross Domestic Product is the total market value of all final goods and services produced in an

economy in a given year.

STATION 4 Picture #1

STATION 5 Picture #2

STATION 6

Farmers had been having a tough time for much of the 1920s before the Great Depression started. With new machinery, farmers were growing more crops than ever before. However, this caused prices to drop so low that they couldn't make any profit. When the Great Depression hit, things got even worse for farmers. In the Midwest, a drought started that would last until 1939. The drought that began in the early 1930’a wreaked havoc on the Great Plains. During the previous decade, farmers from Texas to North Dakota had used tractors to break up the grasslands and plan millions of acres of new farmland. Plowing had removed the think protective layer of prairie grasses. Farmers then exhausted the land through overproduction of crops and the grasslands became unsuitable for farming. When the drought and winds began in the early 1930’s, little grass and few trees were left to hold the soil down. Wind scattered the topsoil, exposing sand and grit underneath. The dust traveled hundreds of miles. One windstorm in 1934 picked up millions of tons of dust from the plains and carried it to East Coast cities.

The region hardest hit, including parts of Kansas, Oklahoma, Texas, New Mexico and Colorado came to be known as the Dust Bowl. Plagued by dust storms and evictions, thousands of farmers left their land behind. Living in the Dust Bowl became nearly impossible. They packed up their families and headed west following Route 66 to California. Jobs were hard to come by during the Great Depression. They were desperate for any work, even if they had to work long days just for enough food to survive. Poor farmers who moved from the Dust Bowl to California were called "Okies." The name was short for people from Oklahoma, but was used to refer to any poor person from the Dust Bowl looking for work.