What was overproduction during the great depression

They lived in barracks, were given clothing, and provided with free meals. The small salary that they earned was sent back to help their families.

The CCC boys planted trees, helped create parks, and did other projects to beautify and preserve natural areas. The s are remembered as hard times for many American families. With the coming of World War II, the government began hiring many men to serve in the army. Factories began receiving orders for military supplies.

But the memories of the Depression did not go away. Many Americans worried that when the war ended, hard times would come again. What factors may have caused a farmer to strike? What might have caused them to NOT strike?

Compare each of these reasons. Reading Tip: Reflecting When you are finished reading the article, think about what you have learned and how you feel about the issues involved. What are your opinions? Iowa PBS is Iowa's statewide public broadcasting network.

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More than two million viewers each month turn to Iowa PBS for programming that reflects a range of interests for Iowans in all demographic categories. Box Johnston, IA Email Us: contact form. Skip to main content. Iowa PBS Home. Town and Cities Suffer Too When factories and stores shut down, many workers lost their jobs. Written for Iowa Pathways by Tom Morain.

Pathways The Economics of Agriculture. Dry, Dusty After this "Black Thursday," they rallied briefly. But prices fell again the following Monday. Many investors couldn't make their margin calls. Wholesale panic set in, leading to more selling. On "Black Tuesday," Oct. There were literally no buyers. The Dow Jones Industrial Average sank from a high of Mass production powered the s consumption boom. But it also led to overproduction on the part of many businesses.

Even before the crash, they started having to sell goods at a loss. A similar crisis was occurring in agriculture. During World War I, farmers had bought more machinery to boost production — a costly move that put them in debt. But, in the post-war economy, they ended up producing far more supply than consumers needed.

Land and crop values plummeted. It all resulted in a drop in prices, both agricultural and industrial, which decimated profits and hurt already over-extended enterprises. Losing money forced companies to cut production — and their workforce. Debt-ridden consumers then stopped spending. That only worsened the situation, causing more businesses to collapse or cut back and, of course, lay off more people.

During its peak in , the jobless rate reached Throughout the '20s, banks had been irresponsible, letting their reserves get dangerously low. But the Federal Reserve was even more so, many economists and historians now think. By keeping interest rates low in the early to mids, the Fed contributed to the heady expansion. Then, after the crash, it did just the opposite of what economists would advise today: Instead of lowering interest rates, the Fed raised them, doubling them in from their pre-Crash levels.

The idea was to discourage lending and borrowing — the "wild speculating" that encouraged the market to bubble, then burst. The Fed also followed the "liquidationist" policy of then-Treasury Secretary Andrew Mellon, which essentially let banks collapse. The thinking: Weed out the financially irresponsible institutions, and overall, a stronger, sounder banking system would emerge. When the stock market crashed, businesses lost their money. Business houses closed their doors, factories shut down and banks failed.

Farm income fell some 50 percent. Once the global financial meltdown hit and the bottom fell out of the market, the number tanked to 6.

Begin typing your search term above and press enter to search. Press ESC to cancel. Skip to content Home Sociology How did the causes overproduction under consumption and stock market speculation lead to the stock market crash of and the Great Depression? Ben Davis October 3, How did the causes overproduction under consumption and stock market speculation lead to the stock market crash of and the Great Depression?

What was the causes of overproduction and underconsumption? What caused underconsumption in the Great Depression? What were the four major causes of the Great Depression? What were the key causes and consequences of the Great Depression?

The topsoil dried out and high winds created dust storms. Poor banking practices were another cause of the depression. Banks loaned money to people who invested in the stock market. When the market crashed, people could not pay their loans and the banks could not give depositors their money. As a result, many banks closed down and many families lost their life savings.