Exam III Study Guide THE GREAT DEPRESSION ERA CHAPTER 23 A time of severe economic depression began in 1929 which lasted for more than a decade Herbert Hoover was elected president at the beginning of this era The depression affected every aspect of society and culture Causes of the Great Depression 1 Lack of diversification in the American economy in the 1920s There were only TWO industries that were economically prosperous in the 1920s construction and automobiles When those industries began declining others emerged to pick up the slack but they were not developed enough to compensate for the decline in the other two industries 2 Maldistribution of wealth industrial economy was producing 3 Credit structure of the economy More than half of families in America were too poor to buy the goods the Small banks were in constant trouble because farmers were deeply in debt and defaulted on loans Large banks also suffered greatly because they were invested in the stock market which eventually crashed and made unwise loans 4 America s position in international trade European demand for American goods began to decline in the late 1920s because of high American tariffs 5 The European economy was being destabilized by the international debt structure that had emerged in the aftermath of WWI the collapse of the international credit structure All the European nations that allied with the US owed large amounts of money to American banks at the end of the war All economies were in serious economic trouble and the US government would not reduce the debts As a result US banks made large loans to European governments ALL CAUSES LED TO THE GREAT STOCK MARKET CRASH In 1928 stock prices rose and continued to increase throughout the next year But in 1929 The Great Bull Market began to fall apart when stock prices were rapidly declining Stocks became worthless efforts to save the market failed First visible sign of the Great Depression and triggered many events that contributed to the weakness of the US economy Unemployment Rate in the Early 1930s When the stock market crashed so did the banking system most banks went bankrupt The unemployment rate was the most frightening aspect of the Great Depression The decline in money supply led to merchants and manufacturers reducing prices cutting back on production and laying off workers Industrial cities were being greatly affected by unemployment Americans felt that unemployment was a sign of personal failure Men were deeply ashamed of unemployment and felt helpless Unemployed workers walked the streets looking for jobs that did not exist Families turned to state and local public relief systems which were unequipped for the amount of families in need of assistance When those systems collapsed private charities and even state governments attempted to help the unemployed Many people began living as nomads Economic adversity greatly affected American families but it also contributed to the strength of many families Impact on Farmers droughts and dust storms than Americans could afford to buy crops Between 1929 and 1932 farm income DECLINED by 60 and a THIRD lost their land Some agricultural areas experienced natural disasters For example severe Despite the natural disasters the farm economy continued and produced way more food Farm prices fell very low which resulted in a few growers making any profit on their Farmers left their homes in search of work many wandered from town to town and worked as agricultural migrants Unemployment often resulted in homelessness and the major decline of the farm economy resulted in malnutrition people were dying of starvation and living on the streets Impact on African Americans Most African Americans were farmers living in the South The collapse of crop prices left most with no income Some migrated to cities where unemployed whites believed they had first claim to all Unemployed whites took the jobs of African Americans used intimidation and work availability violence Problems of segregation and disenfranchisement towards African Americans were evident during the Depression Leading black organizations such as the NAACP fought for the working privileges of blacks and the breakdown of racial barriers this resulted in more blacks joining the labor movement Impact on Mexicans Most lived in urban areas such as California New Mexico and Arizona and other eastern industrial cities Occupied the lower ranks of the unskilled labor force Unemployed whites in the southwest demanded jobs held by Hispanics Mexicans were excluded from relief programs schools and hospitals or offered benefits far lower than what was offered for whites not have much impact Mexican labor union of migrant farmworkers was established in California which did Like African Americans some migrated to cities where they lived in poverty Unemployment also affected Asian Americans and more women were being pushed into the workforce American Social Values Most people responded to this economic depression by committing to the traditional American emphasis of personal responsibility of the individual The success ethic prevailed Americans had been taught to believe that every individual was responsible for his or own fate so many people blamed themselves for their unemployment There was will power and hope for restoring themselves to prosperity and success The Great Depression brought many cultural and social changes such as the radio and movies The radio was popular amongst American families and contributed to the community experience and reshaped American social life Communism during the Depression Hostility towards the Communist Party was a powerful force in the 1930s many communists were imprisoned and driven out of country Literature and journalism contributed to the political changes in American society by documenting the increase of radicalism in the late 1930s The Popular Front antifascist groups enhanced the influence of the American Communist party which impacted the social criticism of writers and artists The Popular Front helped give meaning and purpose to the lives of individuals and attracted many Americans who were apart of the Spanish Civil War against the fascists The Communist Party organized the unemployed in the early 1930s and created unions Under the supervision of the Soviet Union and took orders from their leaders The economic depression was evidence of the failure of capitalism Supported the rural poor and created the Southern Tenant Farmers Union
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