The Great Depression and its causes and effects.

     The Horror  of  the Thirties

                                                 The story of Americas worst days.

 

                  Have you ever wondered about the Great Depression? Thousands of people every day think back to this Dark, Dastardly, somber time. The great depression started as a stock market crash and became so bad, everyone started calling it the Great Depression.

                The Great Depression was a terrible time. It didn’t just slump the United States economy but caused people to lose hope in anyhting good ever happening. People worried  that thier kids wouldn't have a career or anyhting at all. The US. dealt with this Depression when other countries had to completely rearrange their governments.

 

             But  there's just one question, how did such a horrible depression start? Before we get to the actual Great Depression, and the panicking, let's go back about 15 years to 1914, the start of World War I. World war one began as an assassination, and turned to a chaotic world war, many countries taking sides with their allies. When World war I began many young, jobless, men went to fight in the war. Needing money many headed off for battle. However even men who had steady income jobs left them to fight in the army. Thinking they would receive more money serving as a soldier, they headed off to volunteer in their nation's armed forces. Others believed that if they went to war  they would come back a hero, But the technological advance in the production of war materials led World War I to be one of the bloodiest wars in the history of the world. Who thought that one shot at the Archduke of Bosnia could destroy everything?

           When World War I ended millions of people had died. Those who did come back couldn’t find jobs. Many should've thought twice about quitting. Most businesses had shut down or shifted the production of war materials, making it so that all the goods they produced weren’t widely available anymore.That's why the few soldiers  that came back alive couldn’t find work.

 

World War I caused much devastation throughout Europe.

                  The war had cost the governments of Europe more than  $337,000,000,000. Many of the government's couldn’t raise this absurd money so they borrowed from other or raised people's taxes, more developed nations such as the United States, which created large debts. Paying back the debts was a huge problem. Many governments couldn’t pay the guys who served as veterans during the war.

                 Another problem European nations faced was the food crisis. Thousands of farms had been burned down during the war so food was scarce. The little supply of food and the high demand for it caused inflation, which is when prices of something increases overtime. At first it was just a little, but of course the government's had to help. The government thought increasing the value of their currency would end the inflating prices of food. What they didn’t know is that the higher money supply caused prices to skyrocket. This benefited the US. export market. Producing a great surplus of food, farmers didn’t know what to do with just went to waste. But now the United states could sell these goods to Europe and get rich. This was an advantage to the export market but not farmers.

 

          

 The price of farm products during the 1920s was at an all time high.

             As Europe recovers from World War I, The United States stock market soared. Lots of people rushed to invest in the stock market in a hope of making money in the future. Not only did this profit investors but also businesses.

              However unlike the investors who were getting filthy rich, most farmers were barely getting by. The production of farm products, especially in America was rapidly increasing plummeting prices about 50% from 1920-1921. Many consumers took advantage of this and brought huge amounts of theese products, causing the income of farmes to be cut even further.Being sure that production would increase, farmers borrowed huge amounts of money so if they were to get another deduction in income, they wouldn’t lose their farms because they had already paid them off, putting many in debt to pay it back. But Why would these farmers throw themselves in debt. Well it's quite simple, since the price of goods was falling, the cost of producing those goods was growing. So that meant some farmers were spending more to produce their goods than getting in return for them. This angered many farmers, but most knew there was nothing they could do about it. Many lost so much money trying to pay back their debts they either had to rent their land, or flee to the city in search of work.

 

             As Europe recovers from World War I, The United States stock market soared. Lots of people rushed to invest in the stock market in a hope of making money in the future. Not only did this profit investors but also businesses.

              However unlike the investors who were getting filthy rich, most farmers were barely getting by. The production of farm products, especially in America was rapidly increasing plummeting prices about 50% from 1920-1921. Many consumers took advantage of this and brought huge amounts of theese products, causing the income of farmes to be cut even further.Being sure that production would increase, farmers borrowed huge amounts of money so if they were to get another deduction in income, they wouldn’t lose their farms because they had already paid them off, putting many in debt to pay it back. But Why would these farmers throw themselves in debt.Well it's quite simple, since the price of goods was falling, the cost of producing those goods was growing. So that meant some farmers were spending more to produce their goods than getting in return for them. this angered many farmers, but most knew there was nothing they could do about it. Many lost so much money trying to pay back their debts they either had to rent their land, or flee to the city in search of work.

 

               

     

            During the 1920s having an automobile, radio,new electric appliances or a house in the suburbs was cool.  Most Americans then earned only a few thousand dollars per year( about $2,300 per year, or  about $32,400 in today's money ), but saving a few dollars every month could lead you to have some of these new products Thousands of new products were sold and business profits to inclined. Many businesses sold stock to people in hope that people would invest. Costing ridiculous amounts of money, these products were paid through credit, and when people finished paying them ownership would exchange hands. If people didn’t haveenough money, the businesses would lose profit. This is one of the main factors that led to the stock market crash of 1929.

 

             Bank failures increased during the 1920s. From 1920-1921 over 5,00 banks failed mostly in farming areas Back there was no law about paying back loans. So if someone couldn’t pay their debt, the banks money was lost .

 

                  The price of stock more than doubled, between 1925 and 1928. Increased prices of shares encouraged many people, rich and middle class to speculate in the stock  market, However the price of shares fell slightly between early and mid 1928, Because despite still high demand for new products, lots of people realized that they weren’t paying off their goods fast enough, so most people reduced their stock spending. In 1928, and early 1929 the Federal Reserve, increased interest rates, hoping that less people would invest in the stock market. The raised interest rates caused a large fall in spending of new products and nessecetic goods.

               Share prices drop rapidly on Thursday, October 24th,1929, worrying many investors,. Most share prices remained steady through Friday, October 25th, and over the weekend. On Monday Share prices fell again and 12,894,650 shares traded ownership. But Black Tuesday was the worst. On Tuesday, October, 29th, 1929, Which is today, widely known as Black Tuesday, Shareholders, and stock brokers panicked and sold 16,410,030 stock shares. Until that time this many shares had never been sold in a single day! Share prices fell about 80% and thousands watched their money go down the drain. The price of shares varied for the next three years.

               Being uncertain and worried  about the present and future economy,caused many people to cut on spending  of new products. people waited day after day, slowly losing hope, waiting in horror for the next economic crash That came in January, 1930. The high supply and low demand caused production to crash in 1930.

 

 

 

         

 

 

           

 

        In 1925 The United States unemployment rate had been only 3%. In 1930 that tragically tripled to 9% or about 5.4 million americans.

             In 1930 Many banks had lended money to businesses in a hope that they would pay it back. Many banks didn’t think the stock market crash would affect them.As a result of companies not being able to pay back their loans, many banks failed. People who heard about the bank failures rushed to withdraw their saving from the banks, causing even more banks to shut down. From 1930 to 1933 over 9,000 banks failed.

 

                  Meanwhile conditions in agricultural areas were far worse than in the cities. Farmers, and landowners experienced a drought, which later led to a huge dust storm called the Dust Bowl. During the dust bowl there was no rain.None, Zero. The Dust Bowl was a result of farmers digging up the land over, and over, and over again and planting the same crop. Over three million farmers, landowners, and tenants left their farms. Almost 1/2 million  of them went to the west.

                In mid 1930 the price of goods and services in the United States slumped from $104,000,0000,000, or $1352,000,000,000 in today's money to $56,000,000,000, or $728,000,000,000 in today's money. Back then even a fraction of the difference between those two values could have created jobs for the entire unemployed population in the United States.

               In late 1930 the Smoot Hawley Tariff act was passed, which raised prices of exporting goods from the United States. In response countries raised their export rates as well. 

            Exporting had created many jobs, loading unloading, and loading goods again onto ships. so in 1931 the unemployment in the United States hit 25%, or at the time about 15 million , and over 50% in African American communities.The average wage fell to only $ 12 a week ;if you could find a job. Many women had a harder time finding jobs than men did. Mexican Americans and other foreign born people were thought to be responsible for the job shortage. They held terrible low paying jobs in which they beaten or killed if they asked for a raise. Many people who hadn't been born in the US. were deported without a word during the Great Depression which is what happened similarly with the Japanese in World War II.

 

During the great depression Mexican Americans were forced to work in feilds in the boiling sun for a living.(bottom) Some earned as little as three dollars  a week.

                             In late 1931, only those in agricultural areas that the Dust Bowl hadn’t ruined had enough to eat. But those in urban areas, had to buy almost all their food, even the people who had a home, had little to eat. Most people didn’t eat meat that often, only cheap stuff like pasta, rice, or bread were eaten. Many people especially in agricultural areas found, used, and reused. Others made new things out of old things.Resourcefulness was a very valuable skill during the Great Depression. Usually those living in small towns or in the suburbs had an easier time getting by than those in the city.

 

 Apple vendors were common during the Great Depression.

Hooverville, down. Hoovervilles were horrible little towns where homeless people lived.

                  In 1932 over 350,000 homeless, jobless Americans wandered around the country in search of work. Some traveled in freight trains and lived in freight yards. But  most lived Hoovervilles. Hoovervilles were small towns made of cardboard, glass, metal pipes, wooden crates,tar,plastic,and basically any materials that were found. The largest Hooverville had its own mayor and church! These old terrible towns were made in honor of President Hoover’s “great help toward the Great Depression”.  First to apear during the Great Depression, and surprisingly invented by, the most vicious ruthless criminal ever, Al Capone, soup kitchens prevented many homeless children and adults from starving to death. However most soup kitchens were uncommon. 

                       Hoover was so hated in the US., because of his lack of help toward the depression. Believing that businesses controlled the economy, Hoover passed on money, and resources to businesses. However this didn’t at all help the job crisis, or any crisis! Hoover didn't know this, but one of the reasons why he was so hated wasn’t that he didn’t provide resources to the people, but his officials were stealing from him right under his nose. And he thought that they were going to the people. The few resources President Herbert Hoover distributed among Government Representatives in a hope that they would get passed on to the Poor Hungry Americans suffering from the Great Depression, were actually kept by the greedy, corrupt, deceitful,indifferent, city and government officials 

   While the hungry, unemployed people,were suffering from  the depression, government and ,city officials were enjoying an easy comfortable right, living off materials they had stolen from the goverment

 

In 1932 President Herbert Hoover lost the election by a landslide for his little help toward the depression. Not only that, but Hoover had actually once been a very effective president, but then the great depression came and Hoover couldn’t cure it. On November, 6, 1932 Franklin Delano Roosevelt was elected President. Most people who had voted for him hoped he would heal the Depression because of all his experience. In 1933 Roosevelt was sworn in as the 32d president of the United States.

Although most people didn’t  know that Franklin Roosevelt had a serious disease called Polio. Polio affects your ability to do physical activity such as walking, jogging, and jumping. When Roosevelt was around there was no vaccine or cure for Polio, so he made illegal for press to watch him doing physical activities.

 

Franklin D. Roosevelt (left)

                 On March 4, 1933, almost 82 years ago Roosevelt was sworn into office and made his inauguration speech that very day. A swarm of over 200,000 people came to watch him make his speech. During the his inauguration speech FDR said a famous quote, “ There is nothing to fear but fear itself”. He also talked about and explained how he would cure the Depression. Many people had put their full hope and trust into Roosevelt.  

 

    In 1933 Roosevelt hints about something called the New Deal which he thought would  help the US. economy grow. In 1933, Rosevelt decided to try out the New Deal. Roosevelt's first goal was to end the bank crisis. Lots of banks had closed down wiping out people’s savings, and frightening other  On March, 6, 1933 Roosevelt declared a “Bank Holiday”, and closed down every single bank in the country. This was a weird day for many people. Even Millionares couldn't pay for simple stuff, like a cup of coffee, or a subway ride, because they didn't have cash. On March 9,1933, by the government, the Federal Reserve was instructed  to send inspectors to the country's banks. Banks only with a clean record, and financially strong past and present would reopen.

Roosevelt's next act was called the steagall banking act in June,1933. This gave the Federal Reserve power crackdown on  people who couldn’t pay back their loans.

On a cold day in March of 1933, Congress sat down and discussed a way to help end the stock market speculation decline and the buying of unsafe stock. In 1928 the federal Reserve had increased interest rates hoping that speculation would decrease. It didn’t until 1929 and probably more than the Federal Reserve had hoped. In 1934 the Securities and exchange commision made sure that People who invested in the stock market had full financial information about the company's past and present so the owners couldn’t sell them unsafe stock. This act was passed because Before it those who had invested were unaware about the company's past actions. Although the stock market speculation rate didn't reach it's normal rate until 1953, this act reduced the risk of buying stock, so if someone were to put thier life savings into a share they would know which bussinesses to and nlot invest in.

 The socail securaties act was signed By Roosevelt On a chilly day in March, of 1934.

The AAA, which stands for Agricultural Adjustment Administration was created in 1933.The AAA’s main goal was to relieve the agricultural Depression in the Midwestern United states. The AAA thought that decreasing production of farm products.The AAA paid farmers and landowners to produce less.  This increased not just farmers income but the price of goods.                                         

   Proposterous.Unfair. This was the peoples response toward this policy. Making goods out of reach during a time of poverty and unemployment, was considered bad policy. Also the funds that union farmers with the AAA were receiving weren’t split with tenants renting and living on their farms, as well as this policy didn’t apply to African American Landowners. In early 1934 trial was held and the Agricultural Adjustment Administration was declared unconstitutional because of its discrimination toward African American Landowners, as well as the Bribes; which were illegal, it gave out to slow production and raise prices. In addition for African Americans the AAA paid them less for their  products than for other landowners.

  

              In 1935 The NRA was established and created  a minimum wage, maximum work week plus inspectors and news reporters would be sent in and told to report back about the working conditions as well as the number of employees fired and the minimum price . A Minimum wage of  $0.25 per hour, and 44 hours a week was set . Why such a low minimum wage? Well today the minimum wage is $7.25 per hour, but back then $.25 was  $3.25 in today's money. Roosevelt set the minimum wage mostly to African Americans because they weren’t getting paid enough. But only unions were inspected, and most unions wouldn’t pay, or even let African Americans work, as they did Whites. African Americans were forced to work in private businesses where they were forced to work long  hours and earn meager wages, sometimes even lower than the actual federal minimum wage! Many African Americans called the NRA, Negroes run around, because despite the rising unemployment rate, The  African American unemployment rate was remaining the same.  

 

African Americans were often discriminated during the Great Depression. (Top, left), African Americans can't find jobs so they must leave.(Bottom left) African Americans are kicked out of a bar because of thier skin colour.

              The New Deal relieved some of the worst conditions during the Depression. Being grateful for his help toward the Depression, Roosevelt was elected to a second and third term, which was cut short when he died from polio in late 1944, the  It created jobs for millions of skilled and unskilled workers, even so the unemployment rate didn’t decline back to 3% until 1943. The new deal also lowered tariffs and devalued the dollar, or decreased its value.

The new Deal didn’t completely end the depression by itself, it took a World War and a new president as well. Human suffering had become a reality during the great depression  

The Great Depression taught people that you should take what others give you, and be grateful for what you have, even if it's not what you want. But the United States lived through the depression with it’s skills of resourcefulness and determination.




                                       

                                       

                                                          Glossary

         1.  Somber,pg 2(adjective)Opressive or grave mood.

         2. Dastardly,pg2(adjective)Wicked or cruel.

         3. Debts, pg4(noun)When money is owed.

         4.Inflation,pg4(noun)The cost of goods increasing overtime.

         5. Currency,pg4(noun)The type of money used in a country.

         6.Surplus,pg4(noun) Leftovers after demands are met.

         7. Stock Market, pg5(noun)A stock Exchange.

         8. Consumers,pg5(noun)A person who purchases stuff to use.

         9.Deduction,pg5(noun) Thge action of subtracting something.

         10.Stock,pg7(noun)Shares sold to people by  bussineses.

         11.Federal Reserve,pg7(noun) The central and most important bank in the United States.

         12.Intrest,pg7(noun)Money paid for delaying the payment of a loan.

         13.Agricultural,pg9(noun)Having to do with farming.

         14. Polio, pg14(noun) Desiese that affects your abilility to do physial activity.

 

 

Most Hardest hit Regions, by The Great Depression 

 

1. Midwest.The depression devestated the Midwestern sates but Oklahoma was hardest hit by it. Oklahoma during the great Depression was considered a desert, because the Dust Bowl had hit it so hard.

 

2.  Northeast. The Northeast was ruined by the Great , mostly because the stock market  is located there. Also living in the city was highly  impossible unless you had a good job. Much inflation happened during the Great Deppresssion, especially of farm products, as an effect of the Dust Bowl.