What were the social consequences of the Great Depression?

Learning objective – to examine the impact of the Great Depression on US society

I can describe the impact of Great

Depression on US society in t least

three ways.Grade D

I can explain the impact of the Great Depression on US society in at least two ways.

Grade B

I can explain and analyse the impact of the Great Depression on US society in three different ways.

Grade A/A*

Starter – What percentage of the American workforce was unemployed

in 1932?

24.9% of the American workforce was unemployed in 1932. This equated to

13 million people out of work.

How were banks hit by the Great Depression?

Banks that had trading share lost huge amounts of money and just after the Crash many people wanted to withdraw their savings at the same time. This is called having a ‘run on the bank’.

Banks simply did not have enough money to pay out everyone’s savings at once. Those who went early were lucky and got their savings. However, banks that could not cope closed and went bankrupt. Many never got their savings.

In the Great Depression, 5,000 banks closed with over 1,000,000 losing their savings.

How were businesses hit by the Great Depression?

Many businesses went bust when banks demanded the repayment of their loans and could not meet these demands. Mainly because the banks demanded immediate repayment.

However, businesses that did survive faced huge challenges to survive the Great Depression –

• Banks refused to give loans and credit to businesses. This was crucial in the period between buying raw materials and selling the finished goods. Without this money, many businesses went bankrupt.

• People did not buy as many goods, and therefore, businesses profits went down as well as production costs were cut and unemployment rose.

The impact of the Great Depression on US economy

How were most people hit by the Great Depression?

Because the Wall Street Crash hit banks and businesses – everyone was hit by the Great Depression, whether they brought shares or not. For many people, the Great Depression meant –

• Losing their savings if their banks went bankrupt.• Losing their jobs if they worked for a business that went bust.• Losing their homes if they could not keep up with the

mortgage repayments or rent because they had no wages or savings.

• Losing their possessions if they could not keep up with the hire purchase repayments. If they could not pay, banks would seize the items.

Why did some people avoid being hit by the Great Depression?

Because the prosperity of the 1920s was built on credit and unrealistic expectations, the ‘bust cycle’ was unusually widespread. Businesses and farmers faced falling prices while banks were unwilling to lend anyone money.

However, some people were able to avoid the effects of the Great Depression –

• Gangsters still did well trading in the bootlegging industry.• People who had savings in banks that did not collapse were

safe.• The very rich, lost money but not all of it.• People who managed to keep their jobs or homes.

The Great Depression and unemploymentUnemployment 1925-1933

02468

101214

1925 1926 1927 1928 1929 1930 1931 1932

Year

Une

mpl

oyed

(in

mill

ions

)

The Homeless and the Great DepressionWith many people losing their jobs, many lost their homes as well as they could not keep up with the mortgage repayments. Many homeless families resorted to building shacks on the outskirts of towns and cities forming shanty towns. These shanty towns were called Hoovervilles. Hundreds and thousands of people lived in such places.

Family life and the Great Depression

Marriages fell by just over 20%.

Suicide rates went up by 5%.

300,000 children no longer attended school and some schools closed as the State Government could not afford to maintain them.

Birth rates fell by just over 20%.

Many people could not afford food and relied on soup kitchens.

Family life and the Great Depression

Rising number of hobos and freelance workers

Growing unrest and strikes over reduced wages

Black Americans suffered with 50% unemployed by 1933

Depression was uneven in the middle and upper classes remained affluent. Although personal spending did fall.

TasksComplete the worksheet tasks. These are the main tasks that all students are expected to complete.

Extension task

Make a list of the various ways the Wall Street Crash would affect a

- Family man from New York who works in a bank and has $300 savings and $200 worth of shares with a home fully paid for.

- Farmer in the Deep South who has $200 savings and $100 worth of shares with a mortgage on his farm.

Plenary

This word cloud summarises the content of today’s lesson.

Pick out the three most important words and explain why they summarise your learning in the lesson.