Hey class! Welcome to Causes and Consequences (or Effects) of the Great Depression. The greatest economic crisis in the history of America.<br>
If we are going to talk about the causes, we need to start in the 1920s. Here you have flappers, women dancing, the economy is great! Things are going well. But what we?re gonna see is that many of the seeds of the Great Depression were going on during the 1920s.<br>
One of them was industrial overproduction which created a surplus of goods in America. Also during this time, the government wasn?t limiting corporations or regulating it very much. They also weren?t taxing these big corporate businesses either. So, what did that create? Increased profits and more valuable stock. This was very inflated stock market or value of these companies. Higher probably than it should have been.<br>
So, as the stock market increased prices increased. Products became more expensive. So, why is that a problem? Well, the average worker is still getting paid the same old wages. They can?t afford these new products. And what problem did that create? A growing gap between the rich and poor, where you have a few rich and many poor people.<br>
So, what now then? Well, because you?re not getting and increase in your pay, you are getting the same old wages and products have become more expensive, you are under-consuming, which just means consumers were not buying as many things. Well, remember that industrial overproduction? Now, you have a surplus of goods, which was a fancy way of saying there?s a lot of stuff left over on the shelves and Americans were simply not buying them which hurt businesses. When businesses were hurt, they couldn?t afford to keep their workers and they began firing their workers.<br>
Other factors that lead to the Great Depression. Installment buying and consumer overspending of the 1920s. Buying on margin. People thought they could get rich quick in the stock market and actually borrowed money to enter the stock market. Well, when it crashed Americans lost everything. This all caused or led to the greatest economic crisis in American history known as the Great Depression.<br>
Let?s look at some consequences or effects now. Because you had so much overproduction of the 1920s, you also had overfarming ? overproduction of the land. Combined with a drought, that led to the Dust Bowl, where wind would come by, capture this land that had dust exposed and sweep it up into the air and caused this great storm of dust in the air. And it led a lot of people from the Midwest to move to California to escape the Dust Bowl.<br>
Other effects or consequences ? Bread Lines. Because people don?t have jobs, they don?t have money, therefore they cannot buy food. So, you had people waiting in lines to receive free bread, or soup, or things like that. Obviously, unemployment. Because of business overproduction and a surplus of goods, a lot of businesses couldn?t afford to keep employees anymore, or totally went out of business. This led to people not having jobs. When you don?t have a job, you can?t pay for your house and many Americans were homeless.<br>
One of the things that happened when they were homeless, they still needed a place to live. So, they built things called Hoovervilles. Why were they called Hoovervilles? You see these old shacks? These is were Americans built these kind of shanty towns or makeshift houses. They were named after President Hoover. We look to our president to solve our problems. And at that time it was President Hoover and guess what he said to Americans, ?The economy will correct itself.? The government is not going to get involved. So, Americans blamed their president. And living in these shanty towns and shacks, they called them Hoovervilles after that president that just wouldn?t help them.<br>
That concludes our video. I?ll see you guys in class.<br>
