The Great Depression

THE GREAT DEPRESSION
Depression: a period of low economic activity (no one is making money) and high unemployment (no one has jobs)
THE CAUSES:
1. Overproduction – after the war, factories made too many goods.
2. No one was buying a lot
3. Prices went down, so businesses lost money and had to fire workers.
4. There were some people who had lots of money, but the workers didn’t make any money.
1. The workers couldn’t afford to buy many things
OCTOBER 29, 1929
• The stock market crashed. This meant that the money people had invested in stocks was lost, and many people lost all their money.
Banks had invested people’s money in stocks, and they lost money too. So even money in banks wasn’t safe. People got worried and ran to the banks to get their money. This called many small banks to close
Many businesses had to close, so unemployment went up. People couldn’t afford food or places to live. They had to wait in long lines to get free food from the government.
• People who lost their jobs often lived in “Shanty towns” – temporary houses built out of leftover materials on the edge of town
• At the same time, farmers were also in trouble because their crops were doing bad, and there was a drought (not enough water)
• So many farmers lost their jobs, and many others went west to work as itinerant farm workers (people who move around to where the crops are and work in the fields)
• Immigrants were sent back to their countries because people worried that they were taking jobs from the American people
DEPRESSION IN EUROPE
• Because America had invested (put their money into) European countries, when the stock market crashed, they pulled their money out of Europe.
• This meant that Europe lost money.
• Their economy wasn’t that good, and the loss of more money sent them into a depression too
HELP IS ON THE WAY
• Many countries tried to create programs that helped the people
• New programs included:
– National health care
– Jobs created by the government
– Social security (money for old people when they can’t work anymore)
– Welfare (help for younger people when they can’t get along)