The Great Depression: Causes, Impact, and Aftermath

1. The Great Depression

2. Causes of the Depression • As early as 1926, there were signs that the boom was under threat - this was seen in the collapse of land prices in Florida. • Eventually, there were too many goods being made and not enough people to buy them. • Farmers had produced too much food in the 1920s, so prices for their produce became steadily lower. • There were too many small banks - these banks did not have enough funds to cope with the sudden rush to take out savings, which happened in the autumn of 1929. • Too much speculation on the stock market - the middle class had a lot to lose and they had spent a lot on what amounted to pieces of paper. • The Wall Street Crash of October 1929 was a massive financial and psychological blow. • America had lent huge sums of money to European countries. When the stock market collapsed, they suddenly recalled those loans. This had a devastating impact on the European economy. • The collapse of European banks caused a general world financial crisis.

3. With the Wall Street stock market crash in October 1929, the world economy was plunged into the Great Depression.

4. By the winter of 1932, America was in the depths of the greatest depression in its history.  

5. The entire American banking system reached the brink of collapse. From 1929 to 1932, 5,000 banks went out of business.

7. The Depression had a devastating impact on the economy. Millions found themselves with no way to earn a living.

8. Industrial production dropped by 45 per cent between 1929 and 1932.

9. House-building fell by 80 per cent between 1929 and 1932.

10. Severe drops in the price of crops resulted in farms being abandoned, sold or being foreclosed.

11. In Kansas farmers burned wheat to keep warm – a bushel now fetched only around $0.30, as compared to $3 in 1920. Corn, too, was cheaper than coal and was burned as fuel in stoves and fireplaces. Farm foreclosure

12. When the Russians advertised for 6,000 skilled workers, more than 100,00 applied to go to the Soviet union.

13. In Washington State lumberjacks started forest fires to earn money fighting them.

14. Signs saying 'No Men Wanted' were displayed all over the country.

15. To prevent the school system from collapsing entirely, teachers were often boarded with families in a rotation basis.

16. Between 1 and 2 million people travelled the country desperately looking for work.

17. The number of unemployed reached upwards of 13 million.

18. Many people lived in primitive conditions close to famine. One New York family moved into a cave in Central Park.

19. During the Depression, "Americans resorted to extraordinary shifts. In Kentucky miners ate wild greens, violet tops, forget-me-nots and ‘such weeds as cows eat’.” Soup Kitchen

20. In Pennsylvania they devoured roots and dandelions. Some of the unemployed availed themselves of scraps donated by Princeton dining clubs. Others consumed leftovers from restaurants, as recommended by Secretary of War Patrick Hurley. Soup Kitchen

21. Children were abandoned and orphaned all over the country.

22. “Hoovervilles” – communities of houses made from scrap metal and boxes - sprung up all over American. In St. Louis, more than 1,000 people lived in one such community.

23. Mrs. Charles Benning sweeping steps of shack in Shantytown. - Spencer, Iowa, December 1936

27. Nearly 30 states established systems of barter, and in Washington State stores issued and accepted wooden currency.

28. Although many people went hungry, the number of recorded deaths from starvation during the Depression was 110, although many other illnesses and deaths were probably related to a lack of nutrition.

29. The American economy did not fully recover until the USA entered the Second World War in December 1941.  

30. Sources • www.bbc.co.uk/.../usa/walldepressionrev2.shtml • Photography by Dorothea Lange http://memory.loc.gov/ammem/fsahtml/fachap03.html • www.shorpy.com/taxonomy/term/43