– Banks make loans that borrowers cannot pay back.
– After the stock market crash, many businesses cannot find people who will invest in their growth.
– Many businesses and factories fail.
– Millions of Americans are out of work.
– Many are homeless and hungry.
– Families break up and people suffer
Reduction in Purchasing Across the Board -With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.
In 1928, the top 1% earned 29.94% of the nation’s income (about 24.5 mil.)
By 1932, U.S. manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force.
In previous depressions, farmers were usually safe from the severe effects of a depression because they could at least feed themselves. Unfortunately, during the Great Depression, the Great Plains were hit hard with both a drought and horrendous dust storms.
It was a period of protests and hunger marches — and unionism spread like wildfire — but many people suffered quietly, ashamed of their poverty.
Many countries wanted to protect themselves from the chaos in the economy, so they decided to make more laws restricting trade and reinforce the ones that were already in place.
During the next three years stock prices in the United States continued to fall, until by late 1932 they had dropped to only about 20 percent of their value in 1929.
by 1933, 11,000 of the United States’ 25,000 banks had failed. Signaled the beginning of government involvement in the economy and in society as a whole.
Many factors led to the Dust Bowl. The increased demand for wheat during World War I, the development of new mechanized farm machinery along with falling wheat prices in the 1920s, led to millions of acres of native grassland being replaced by heavily disked fields of straight row crops. Four years of drought shriveled the crops and left the loose top soil to the mercy of the ever-present winds. It occurred in the driest region of the Plains – southeastern Colorado, southwest Kansas and the panhandles of Oklahoma and Texas – became known as the Dust Bowl.
Three million people left their farms on the Great Plains during the drought and half a million migrated to other states, almost all to the West. The drought that helped cause the dust bowl lasted seven years, from 1933 to 1940.
Dust storms were not new to the region in the 1930s, but a number of demographic and cultural factors were new. First there were a lot more people living in the region in the 1930s than there had been in the 1880s.
During the Depression, schools across the Plains sent students home because of the dust storms. Some school administrators were worried about what might happen to the students’ health. There had been cases of “dust pneumonia” where dust clogged up the lungs just like the disease. Other administrators and teachers, especially in the southern Plains, knew that people had gotten lost in dust storms when visibility went to zero.
89 million acres of land were severely damaged or destroyed.