Texas een . TT During the 1920s, under Presidents Warren G. Harding and Calvin Coolidge, the United States economy seemed strong. But in 1929, the year when Herbert Hoover became President, the country went from good times to bad in a hurry. In that year, a long and severe decline in the economy began. This decline became known as the Great Depression. Trouble for Farmers The United States economy seemed to be booming in the 1920s. As the decade passed, though, several signs suggested that the economy was not as strong as it seemed. Trouble was growing in the lives of farmers and factory workers. With new machinery ; ; in the 1920s, farmers Most farmers never fully enjoyed the good times of the 1920s. ald grow and New technology should have made their work more psp profitable. Gas-powered tractors and other machinery than before allowed farmers to grow more crops. But se growing more crops turned out to be a = problem. The supply of food became greater than people's demand for it.RT AN ites) a A RU RU Rc pane More Supply, Less Demand Lower demand caused food prices to fall. Many farmers had taken out loans to pay for their expensive new machines. Now they couldn’t make enough money to pay back the loans. Farmers who didn’t buy modern equipment also suffered. Their costs for producing food were too high. They couldn't compete with the larger farms. Farm workers couldn’t compete with tractors. It seemed that their labor was no longer needed. In the 1920s, many migrated to the cities to find other work. ‘These migrants often found that the supply of jobs was limited even in the cities. Companies had built new factories 1. © Cause and Effect and hired more workers to meet growing consumer demand. jentify ond fil in But Americans could not consume all the goods being three effects of new farm produced. Companies now had to cut production and jobs. technology. Effects of New Farm Technology Cause Effect 1 Effect 2 Effect 3 Farmers Farmers can now The extra supply Farmers lack the take out of food income to loans to buy fractors and other new machinery.ST. IN PANIC ‘Made to Kill Italy's Crot ne { Hllywood Fire al “act,” Worth 2. This newspaper headline announced the crash of the stock market. Identify and circle the words in the newspaper that tell about the crash. 3 Gave $700,000 Destroys one RINNE, SUMS Cos The Stock Market Crash By the late 1920s, the signs of trouble were clear. Factories were letting workers go or not hiring new workers, High Duty Group «| the condition of being out of EAGLE Driv work—was rising. Without jobs, Americans could not afford to buy new products. People began to buy less, In March 1929, President Hoover gave his first public address. In the speech, he told the American people: “1 have no fears for the future of our country. It is bright with hope.” Seven months later, the stock market crashed. The stock is where people buy and sell stocks. A crash is a sudden, steep drop in the prices of stocks. Stocks are shares in the ownership of a company. If a company wants to raise money, it sells stocks. The value or price of a stock generally rises when a company does well, but it falls if the company does poorly. Buying on Credit During the 1920s, some people got rich and many others hoped to. People bought stocks hoping to resell them for a big profit. But many did not buy stocks with their own money. Instead, they used or borrowed money. These people expected stock prices to keep rising. Then they could pay back their loans and still make a profit. If stock prices fell, they might owe more money than their stocks were worth. They could lose everything. In the 1920s, stock prices rose unusually fast and people invested. Then in the autumn of 1929, stock prices began to fall. Many people worried about losing money, so they sold their stocks. Others panicked. They sold their stocks for whatever price they could get. As a result, stock prices fell by one third. People rushed to sell more stocks, and prices kept falling. Many people had paid much more for their stocks than they were now worth. These people were ruined financially.The crash was just one of several causes of what is known as the Great Depression. The Great Depression was the longest and most severe economic decline in United States history. The economy goes through ups and downs all the time. A depression begins as a normal downturn in the economy. In the late 1920s, the overproduction of goods caused a downturn. The stock market crash and the buying of stocks with borrowed money helped the downturn grow into a depression. Ayear after the crash came the first bank panics. Consumers had bought cars and other goods on credit. Now they could not pay their loans. Many banks ran out of funds and had to close. People who had savings in those banks lost them. Customers of other banks raced to withdraw their savings. Many of those banks ran out of cash and had to close, too. (ne Puta avait ae 3. Early in the Great Depression, people rushed to this bank to find out if they had lost money. Explain at least one way you think a bank run like this one could affect a family.The Depression Deepens The stock market crash caused Americans to believe that the future might not be very bright. Fearing a loss of income, consumers cut back on their purchases. Businesses began to limit spending, too. Production declined, so people lost their jobs. Jobless people, and those who feared losing their jobs, bought even fewer goods than before. This slowdown in consumption lowered production further. Even greater unemployment resulted. As this downward spiral continued, the economy grew weaker and weaker. High tariffs added to the economic problems. A tariff is a tax on imports, or goods from other countries. To protect American farmers against competition from cheaper imported Companies cut jobs. crops, Congress passed a tariff in 1930. This caused other countries to pass their own tariffs. These “tariff walls” kept many American companies from selling goods overseas. Early in the Great Depression, President Hoover took steps to try to pull the country out of its economic slump. He thought government had an important role to play in the economy. Hoover urged companies not to cut jobs or wages. He urged Congress to put money into building roads, bridges, and other public works. These projects, he said, would create jobs. He supported loans to help banks and industries. Yet the Great Depression only got worse. 4. © Cause and Effect Identify and fill in the missing information to complete the cause-and-effect diagram. Causes of the Great Depression Consumers cut spending. Companies Consumers spend even less.President Herbert Hoover 5. This photo shows a typical Surviving the Depression For many Americans the Great Depression became a test of their survival skills. People cut their spending down to the most basic needs. But everyone needed food, clothing, and shelter. President Hoover urged local, private agencies to help. They did. In cities around the country, charity and other organizations offered free aid to people in need. Jobless people stood in long lines to receive free bread or a bowl of soup. In 1933, the unemployment rate rose higher than 25 percent. One of every four American adults was out of work. Unemployment stayed above 14 percent for the rest of the 1930s. Most of the jobless were former factory workers and other laborers. Many people lost their homes when they could not pay their housing loans. Some moved in with relatives. Others moved to public areas, where they built shacks of cardboard or other materials they could find. These people blamed President Hoover for their troubles and called their shack towns “Hoovervilles.” Hooverville. Write a sentence explaining why a family might have lived there.LEGEND 6. Identify and circle the state abbreviations where it = was hardest to farm during the years of the Dust Bowl. inithe| Dust Bowl messrra chest storms rolled across the plains. Problems on the Great Plains Before the Great Depression, farmers had already faced hardship. By the early 1930s, many had lost their farms. On the Great Plains, farmers who had managed to keep their land now had to deal with a new challenge. Their region was hit by a drought. Before World War I, the Great Plains region had been mainly grassland used to support cattle. During the war, farmers began to plant wheat instead. In the 1920s, new technology allowed farming to expand. Now the soil was in poor shape. When the drought came, the sun baked the weakened topsoil, turning it to dust. Then the strong winds of the Plains blew the soil into the air. Great clouds of dust blocked the sun. Farmers. fought a losing battle to keep the dust out of their homes. American novelist John Steinbeck describes their efforts in his novel about the Great Depression, The Grapes of Wrath: “Houses were shut tight, and cloth wedged around doors and windows, but the dust came in so thinly that it could not be seen in the air, and it settled like pollen on the chairs and tables. . ..” 550The Dust Bowl Even worse than the dust was the damage that wind caused. After the topsoil blew away, nothing would grow. Much of the Plains became known as the The map on the previous page shows the area that suffered the greatest damage. Farmers there still owned their land, but it would no longer grow enough crops to support their families. More than 2 million people from the region packed up their belongings, left their farms behind, and headed west. Many of them ended up in California working as migrant workers or day laborers. 7. Briefly describe what you might see, hear, or feel if you were outside during this dust storm. Wp TEKS 5.4, 12.8 8. @) Draw Conclusions What effec do you think bank panics had on the abiliy of consumers or businesses to toke out new loans? Explain your conclusion. 9 Qa During the Great Depression, your family receives a letter from @psev Ideas your mother's sister. Her family farm is being hit by the Dust Bowl. Describe what she writes about her life and what you think she should do. 10. Summarize Evaluate how lower demand hurt farmers during the late 1920s. 551