What caused the Great Depression?

Stock Market Crash of 1929

The stock market began to crash Monday, November 21, 1929.  It took a steep nosedive and lost between ten and fifteen billion dollars.   Many people had money invested in stock, so thousands of people lost money.

Banks

Banks had their money invested in stocks, too.  So when the stock market went down they lost almost six billion dollars.  This people started to want to withdraw money from the bank but this made it so the banks had no money and closed.  Many people lost even more money from this.

The Dust Bowl

There was a severe drought that helped make the dust bowl.  Another cause was the farmers.  After many years of digging and planting the ground, the topsoil dried up and started blowing around as dust.  There were big storms that were full of dust that could sometimes last for a day.  

Overproduction and Underconsumption

During the 1920's, companies made more items than they could sell. This created a surplus of items.  As the depression came along people began to buy less.  When people bought less, the companies made less money so they had to pay their employees less or fire them.  This led to the common person having less money to buy things with.

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Effects of the Great Depression

FDR was elected president.

Franklin Delano Roosevelt was elected president in 1932.  He created the New Deal and acts to counteract the depression.  

Parts of the New Deal

Federal Evaluation of Banks

This gave the ability to inspect banks to the government.  It also gave the government the power to close failing banks.

Civilian Conservation Corps

The Civilian Conservation Corps took long men and put them to work.  They got paid to do environmentally friendly activities such as planting trees in the Dust Bowl area. 

Social Security Act

The social security act gives everyone an unique number to help identify them.  It also gives money to people who are 65 and up and people who are unemployed.  This act is still around today.

Fair Standards Labor Act

This made the regular  work week 44 hours.  It also set a minimum wage and abolished child labor.