The Great Depression (1929-1941) and The New Deal

Main Facts to Remember

• overproduction of consumer goods: by the late 1920s people weren’t buying as many toasters, washing machines, cars, etc. anymore; but the factories kept on making them in high numbers – many companies went bankrupt (out of business).
• overproduction of farm crops: as Europe recovered from WW I, they didn’t need food from the US anymore, but US farmers kept growing many crops; this led to an oversupply of farm crops and very low prices –many farmers had trouble surviving.
• too much credit – many people and businesses were buying the new consumer products on credit; when the economy slowed, many couldn’t pay their debts.
• speculation on the stock market –people got rich in the 1920s buying risky stocks “on margin” (with credit); when the stock market crashed, many lost their life savings.

Crowd at New York's American Union Bank during a bank run early in the Great Depression.:

Study Questions

• How did the Depression affect the everyday lives of Americans?
• What were the main causes of the Great Depression?
• What is "too much credit" means?

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