Causes and Effects of the Great Depression

There were many causes to this Great Depression that we are now coming out of. The Great Depression has also led to many diverse effects, and different people in both the rural and urban parts of America have had to overcome various obstacles to deal with these effects. Many Americans today are still facing great hardship. Some causes of the Great Depression include the stock market crash of 1929, drought conditions, American economic policies, and bank failures, among many other reasons.

The stock market crash is a major cause of the Great Depression. Many people consider it the start of the Depression. Millions of dollars were lost as 16 million shares were sold by investors. People went to the banks to retrieve their money only to find that the banks had lost their money. The amount of money in circulation dropped, leading to deflation. Those who had money at this time were unwilling to pour any of it into the economy. Thousands of businesses were forced to close, and unemployment rose to between 25% and 35%. As banks feared failure, they foreclosed thousands of loans and took possession of many properties displacing thousands of people. This led to many different things. One was an uneven distribution of wealth: 1% of the population held 40% of the nation’s wealth. The  rich were richer and the poor were poorer.

The dust bowl was also a huge cause for the Great Depression. After a record wheat harvest in 1931, the prices for wheat began to drop. To keep up on payments for new equipment and land bought on credit, farmers on the Great Plains had to farm more land. This meant that native plants that kept the soil in place were uprooted, as farmers used up more and more land. At this time there were also severe droughts in the Plains. For these reasons there were many extreme dust storms, the largest being on Black Sunday.

            An effect of the dust bowl was the creation of the Soil Conservation Act of 1935. It was signed by President Franklin D. Roosevelt on April 27^th. This act protected the soil from erosion. It did this by giving farmers money to keep native grasses, trees, and other plants that would keep the soil in place.

            As the dust got worse, farmers had no choice but to abandon their homes when the bank came to foreclose them. With the little money they had the farmers packed up their families and moved away to look for work. By 1940, 2.5 million people had left the Plains states because of the Dust Bowl and the Great Depression. 10% of those people had fled to California.

            Another effect of the dust bowl was dust pneumonia. People began to die of this disease by the spring of 1935. The Red Cross declared a medical emergency, and opened six emergency hospitals in the Plains States. Many people developed home remedies for some of the ailments of the disease. Others did their best to prevent it. Dust pneumonia even influenced pop culture in Woody Guthrie’s “Dust Pneumonia Blues.”

Of the people who fled the Plains States, many sought shelter in America’s cities. These cities were not left untouched by the Great Depression, and many of those who lived in an urban area faced hardship as well. Many people were evicted from their homes when they could no longer pay rent or a mortgage. At the peak of the Depression 17 thousand families became homeless every month, and there were over a million jobless people in New York City alone.

As the number of homeless grew, a new type of housing emerged – the “Hooverville.” These shantytowns were named after President Hoover because many blamed him for the start of the depression. The homeless and the poor built these towns at the edge of cities, making homes out of what most would consider garbage. With no other choice, unable to find work to support their family, many men resorted to waiting long hours in bread lines for a meager meal.

There were many causes to the Great Depression. And, although it is ending, its effects on all Americans will last for some time more. As a new era is being ushered in, and most are hoping that this era will be a better, happier one.