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The Great Depression - Coggle Diagram

- - - - Overproduction of Goods:
        Factories and farms made too many products, like clothes and food. But people didn’t buy enough of them because they didn’t have enough money. Farmers grew too much food, and prices fell. Because prices were too low, farmers couldn’t make enough money, and many lost their farms.
        
        Bank Failures:
        Many banks lost their money because they had invested it in the stock market. When people couldn’t pay back their loans, the banks lost even more. Some banks closed, and people lost their savings.
        
        Unequal Distribution of Wealth:
        In the 1920s, the rich were getting richer, but most people were not. Many families were struggling, and when the stock market crashed, they didn’t have enough money to survive.
        
        The Great Depression was the worst economic crisis in U.S. history, lasting from 1929 to the early 1940s. It was caused by a combination of factors, including the stock market crash of 1929, bank failures, overproduction of goods, unequal wealth distribution, and poor government policies. The stock market crash, known as Black Tuesday (October 29, 1929), was triggered by excessive speculation, where investors borrowed money to buy stocks. When prices started falling, panic selling caused a massive market collapse, wiping out billions of dollars in wealth. Many banks had invested in stocks and lost money, leading to bank failures. Over 9,000 banks shut down, and because the government had no protections for bank deposits, millions of Americans lost their life savings. This lack of financial security led to widespread panic, further deepening the crisis. Another major cause was overproduction in both agriculture and industry. Factories and farms produced more goods than people could afford to buy, leading to falling prices and business closures. Many companies laid off workers to cut costs, increasing unemployment. Unequal wealth distribution made the situation worse because the richest 1% of Americans controlled over 33% of the nation's wealth, while most people lived paycheck to paycheck with no savings to fall back on. When businesses failed, workers lost jobs, and there was no financial safety net. Additionally, the Hawley-Smoot Tariff of 1930 aimed to protect American businesses by increasing taxes on foreign goods, but it backfired when other countries raised their tariffs in response, reducing global trade and worsening the economic downturn.
- - - - Farmers and the Dust Bowl:
        Farmers were hit especially hard during the Great Depression. Many farms were destroyed by a terrible disaster called the Dust Bowl. The Dust Bowl was caused by severe droughts and poor farming practices, which led to huge dust storms. Crops couldn’t grow, and many farmers had to leave their land. Some moved to California in hopes of finding work in farming or other industries.
        
        Migrants to California:
        Many families, especially from the Midwest, packed up and moved west to California. These people were called Dust Bowl refugees. They had a difficult time finding jobs in California and faced discrimination, but many were able to find work on farms or in other industries.
        
        Living Conditions:
        People who lost their jobs or homes often relied on soup kitchens and bread lines to get food. Many families had to share homes or live in crowded conditions. The poverty made life very hard for millions of Americans.
        
        The human impact of the Great Depression was devastating. By 1933, over 15 million people were unemployed, and poverty was widespread. Many families lost their homes and moved into makeshift shantytowns called “Hoovervilles.” Breadlines and soup kitchens became common, as people struggled to find food. Farmers in the Great Plains faced an even bigger disaster: the Dust Bowl. Poor farming techniques, combined with severe droughts in the 1930s, turned farmland into dry, useless dust. Huge dust storms destroyed crops and made it impossible to farm. Over 2.5 million people, mainly from Oklahoma, Texas, and Kansas, were forced to migrate to California in search of work. These migrants, often called “Okies,” faced discrimination and were paid extremely low wages. Many political and social movements gained support during this time, as people demanded government action to address poverty and unemployment. While some supported FDR’s programs, others feared that America was becoming too socialist. The Great Depression changed how Americans viewed the government, shifting expectations about economic intervention and financial security.
- - - - Greater Government Involvement in the Economy:
        The government started playing a bigger role in helping people. Before the Depression, the government mostly stayed out of the economy, but the New Deal programs showed that the government could and should help when times were tough. The Social Security Act and WPA are still in place today, helping people who are retired, sick, or in need of work.
        
        The Role of Labor Unions:
        Unions became stronger because of the National Labor Relations Act. Workers were able to fight for better wages and working conditions. Labor unions are still important today.
        
        The Rise of Political Movements:
        The Great Depression caused some people to turn to more radical political ideas. On the left, some people wanted the government to take control of businesses and redistribute wealth. On the right, others wanted less government intervention and more personal freedom. This created political debates that continue today.
        
        Social Changes and Family Life:
        Families were affected in many ways. Many had to work together just to survive. Kids often dropped out of school to help their families earn money. The Depression changed how people thought about the government’s role in their lives and created a greater sense of community and support among neighbors.
        
        The long-term effects of the Great Depression shaped the U.S. economy and government policies for decades. The Social Security system, created during the New Deal, still provides financial assistance to retirees and unemployed individuals. The FDIC ensures that bank deposits are protected, preventing bank failures like those of the 1930s. The government took on a bigger role in regulating businesses and the economy, introducing labor laws that gave workers more rights, including the right to unionize. The New Deal also expanded public infrastructure, building thousands of roads, bridges, schools, and power plants that are still in use today. While the Great Depression ended with the economic boom of World War II, it left behind a lasting debate over the role of government in economic crises. Some believe government intervention is necessary to prevent financial disasters, while others argue that too much government spending can harm the economy. The lessons from the Great Depression continue to influence economic policies, shaping how the U.S. responds to financial crises in modern times.
- - - - Franklin D. Roosevelt (FDR) and the New Deal (1933):
        After Hoover, President Franklin D. Roosevelt (FDR) became president in 1933 and started the New Deal to help fix the economy. The New Deal was a series of programs and laws to provide jobs, support farmers, and help people in need.
        
        Key Parts of the New Deal:
        
        Works Progress Administration (WPA):
        
        This created jobs for millions of people. It paid people to build roads, bridges, schools, and other things to help improve the country.
        
        Social Security Act (1935):
        
        This program helped older people and those who couldn’t work by giving them money. It still exists today to help people when they retire or can’t work anymore.
        
        National Labor Relations Act (Wagner Act):
        
        This law gave workers the right to join labor unions and fight for better wages and working conditions.
        
        Agricultural Adjustment Act (AAA):
        
        This helped farmers by paying them to grow fewer crops. This made the prices of crops go up again, and farmers could make more money.
        
        Tennessee Valley Authority (TVA):
        
        The government built dams in the Tennessee Valley region to help control floods, bring electricity to rural areas, and provide jobs.
        
        The government’s response varied under different presidents. Herbert Hoover, who was in office from 1929 to 1933, believed in a hands-off approach and thought the economy would fix itself. He urged businesses not to cut wages and funded public works projects like the Hoover Dam, but his efforts were too small to make a real impact. He opposed direct government aid to individuals, fearing it would create dependency, but this only made him more unpopular as conditions worsened. By 1932, with 25% of Americans unemployed and thousands losing their homes, Franklin D. Roosevelt was elected president, promising a “New Deal” to help the country recover. FDR immediately declared a bank holiday to prevent further failures and created the Federal Deposit Insurance Corporation (FDIC) to protect people’s savings. His New Deal programs focused on three areas: relief, recovery, and reform. The Works Progress Administration (WPA) created over 8 million jobs, building public projects like roads, schools, and parks. The Social Security Act of 1935 established unemployment insurance and retirement benefits, which still exist today. The Agricultural Adjustment Act (AAA) paid farmers to reduce crop production to prevent overproduction and stabilize prices. The Tennessee Valley Authority (TVA) built dams and power plants to bring electricity and economic development to rural areas. The Wagner Act protected workers' rights to unionize and negotiate fair wages. However, not everyone supported the New Deal. Some believed the government was spending too much and gaining too much control over the economy, while others thought the programs didn’t do enough to help struggling families. The Supreme Court struck down some of FDR’s programs, leading to political conflicts over government power.