What caused the Depression

One of the major causes of the depression was the stock market crash of 1929. After World War I, the mood of the 1920s, also known as the "roaring twenties" consisted of new technologies and businesses. Many businesses opened up and people started buying shares because they were not seen as a threat. Many people of the time only thought that the value of stocks went up. In April of 1930, stocks were up almost 13 percent, but started to decline after. As a result, a lot of people invested their life savings into stocks because it was seen as a "sure thing". When the stock market crashed, a lot of people had no money and businesses laid people off to save money. Unemployment went up. In 1929, unemployment was at 3.2%, in 1930 it rose to 8.9 percent, and in 1933 almost 25% of the people were unemployed. Unemployment also meant people did not have a lot of money that would go into the economy, which hurt the economy even more.




President Herbert Hoover took action by approving a program that urged the federal goverment to "accelerate their spending" and build some buildings. Hoover even asked companies, such as railroad and utilities, to promise investments and to keep their employees. However, businesses responded to what was going on by cutting down their labor force and cutting costs. Along with unemployment, many people and businesses filed for bankruptcy. "In 1929 there had been 659 bank failures. That number in 1930 rose to 1,352" (The great depression). Even with Hoover's plan, the economy continued to go down.











The Depression affected many states, but took a toll on California. Many of the immigrant workers lost their jobs. Houses were made out of almost anything, "Shelters were made of almost every conceivable thing - burlap, canvas, palm branches." (Picture this). Wages dropped because of more people in the labor force, and protests and strikes were held to battle against the bad conditions and wages. In the United States, agriculture suffered because of the Dust Bowl in the midwest. California was not harmed by this, however, California farm owners actually benefited because there were many immigrants fighting for the same job, farm owners had access to cheap labor. The Depression hurt many people. Many lost their jobs, but in California the owners benefited from the cheap labor of people trying to find jobs.

Reported by:
Mercedez Rodriquez

For more information, check out this video:
http://www.youtube.com/watch?v=4oUcaodWSDE

sources:
http://www.stock-market-crash.net/1929.htm
http://www.fsmitha.com/h2/ch15wd.html
http://www.educationreport.org/article.aspx?ID=4018
http://www.museumca.org/picturethis/3_2.html