Chapter 22 Sections 1 & 2

Industry  Key industries barely made a profit (i.e. railroads, textile, steel)  Some lost business to foreign competition and new technologies  Suffered from declining demand for goods after WWI  The coal industry declined b/c of the development of new sources of energy (i.e. hydroelectric power, fuel oil, natural gas)  New housing starts declined, affecting other businesses that depended on home construction

Agriculture  After WWI demand for farm products fell drastically  Prices dropped  Many farmers could not pay off their debts (loans) and lost their farms, which caused some rural banks to fail

Consumer Spending  By making credit easily available, businesses encouraged Americans to pile up a large amount of consumer debt.  Faced with rising prices, stagnant wages, and high levels of debt, consumers decreased their buying.

Distribution of Wealth  Nearly half of American families earned less than the minimum amount needed ($2,500 per year) for a decent standard of living, while the rich got richer.  This unequal distribution meant most consumers had too little money to buy the goods produced by American factories.

Stock Market  Many investors engaged in speculation and buying on margin, fueling the market upward and generating great wealth, but only on paper.  When the market crashed, many investors lost their life savings.  Speculation: Engaging in risky investments- hoping to make a quick profit  Buying on margin is borrowing money from a broker to purchase stock.

Depression Statistics -11,000/25,000 banks closed -90,000 businesses went bankrupt – leaving people without work -25% of the population was unemployed -30 billion lost in the stock market by Nov World trade fell 40%

Causes of the Great Depression 1. Shrinking foreign markets to sell American goods 2. Crisis in the farm sector 3. Availability of easy credit (people in debt) 4. Unequal distribution of income

Chapter 22 Section 2 Hardship and Suffering During the Depression

Employment  25% of the population was unemployed.  Women, and minority men were discriminated against in the workplace and became targets of hostility.

Housing  Many unemployed people lost their homes.  Many homeless lived in the streets in shantytowns or “Hoovervilles”  Many farmers lost their farms. New York City

Farming  Farmland already exhausted through overproduction was hit with drought and winds turning the plains into the Dust Bowl.  Dramatic decreases in farm prices and income  Many farmers lost ownership of their farms and were forced to become tenant farmers or farm laborers.

Race Relations  Intense competition for jobs sparked existing racial resentments into open hostility and violence.  In African Americans were lynched.  Thousands of Mexican Americans left the U.S. voluntarily or were deported.

Family Life  The Depression strengthened family ties, but also increased family tensions.  Some men abandoned their families, discouraged by their inability to provide for them.  Women also faced greater pressures to provide for themselves and their families.

Physical Health  Poor and homeless people scavenged or begged for food or turned to soup kitchens and bread lines.  Poor diet and lack of health care increased rates of serious health problems.  Malnutrition and starvation grew more common.

Emotional Health  Many people became demoralized  Suicides and admissions to mental hospitals increased dramatically.  People were forced to accept compromises that would affect the rest of their lives.  Some people came to want financial security more than anything else in life.