The fast lifestyles and excessive spending of the 1920s couldn’t last forever. Too many people had bought stocks on margin (taken loans to buy stocks). Most Americans already owned cars and household goods, yet factories kept pumping out more products that no one was buying. Prices for food dropped and farmers weren’t getting paid. Already in debt, many farmers couldn’t pay their bills and lost their farms. Then on October 29, 1929, the stock market crashed. Investors lost nearly $8 billion in one day. The country was already in economic trouble. The stock market crash pushed America over the edge.
Questions and Answers
Question: Should President Hoover have done more to help the country?
Answer: People still disagree about that. President Franklin D. Roosevelt started many social programs when he took office after Hoover. These programs did relieve suffering and did help pull the country out of the Depression. These social programs were meant to be short-term, but continue today. They probably have made people more dependent on the government, in some cases, just as Hoover feared. They’ve also created national debt.
Question: Could a depression happen again?
Answer:It’s possible. The Great Recession of 2008-2010 was a time of serious economic stress for America. There have been other periods of financial struggle and it’s likely that there will be again. But, people can be prepared for these times by avoiding debt, living simply, and setting aside emergency savings.
Visit Scholastic to read firsthand accounts of what life was like during the Great Depression.
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Tobin, Declan. (2021). The Great Depression Facts for Kids. American History for Kids. Retrieved from https://www.americanhistoryforkids.com/great-depression-begins/