The Great Depression: What Caused It?
The Great Depression was a time of economic hardship in America. Many people believe the Great Depression began with the stock market crash of October 1929, also known as “Black Tuesday.” However, there were a variety of things that caused the Great Depression. The Great Depression lasted from 1929 - 1941.
A main cause of the Great Depression was overproduction. Factories and farms were producing more goods than the people could afford to buy. As a result, prices fell, factories closed and workers were laid off. Prices for farm products also fell, as a result, farmers could not pay off bank loans and many lost their farms due to foreclosure.
An event that further affected farmers was a wide spread drought from Texas to the Dakotas. The Great Plains were affected the most by this drought.
The topsoil dried out and high winds created dust storms. As a result, this area became known as the “Dust Bowl.”
Poor banking practices were another cause of the depression. Banks loaned money to people who invested in the stock market. When the market crashed, people could not pay their loans and the banks could not give depositors their money. As a result, many banks closed down and many families lost their life savings.
Effects of these events: unemployment soared, the jobless became homeless, shantytowns (Hoovervilles) were created, families split up (marriages and birth rates dropped), and farming families migrated to other areas to look for work. The Great Depression truly was a difficult time for all people!
