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What Caused the Great Depression? · great-depression · economic-history · 1930s

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What Caused the Great Depression?

with Scribe

A dusty 1930s American street where the scribe stands in front of a shuttered bank, pointing to a long breadline of families and explaining why so many people lost their savings and jobs.

Name the year the Great Depression began and the event that triggered it.
Describe two causes that made the Great Depression worse.
Identify two effects the Great Depression had on everyday families.
Explain one way communities helped each other survive hard times.

Key terms

stock market: A place where people buy and sell shares, meaning small pieces of ownership in companies
Great Depression: The severe worldwide economic downturn that began in 1929 and lasted through the 1930s
bank failure: When a bank runs out of money and closes, so customers lose the savings they deposited
soup kitchen: A place run by charities or neighbors that gives free meals to people in need

From Crash to Collapse

The 1929 stock market crash wiped out the savings many people had invested in shares. Frightened customers rushed to pull their money out of banks, and because banks had loaned much of it out, they ran short of cash and closed. Each bank failure destroyed more savings, spreading fear and shrinking the money people had to spend.

A Downward Spiral

When families had no money, they bought less. Stores and factories then sold less, so they laid off workers, who in turn had no money to spend. This chain reaction is why one crash could grow into years of hardship: each problem caused the next, pulling millions into unemployment, lost homes, and hunger across the country.

Worked examples

Explain why the Depression got worse over time.

Begin with the spark: the 1929 crash destroyed savings and confidence.
Trace the first effect: scared people pulled money from banks, causing banks to fail.
Follow the next link: with savings gone, families spent less and businesses cut jobs.
See the loop: more job losses meant even less spending, deepening the crisis year after year.

Answer: Lost savings led to less spending, which caused job cuts, which caused even less spending — a spiral that deepened the Depression.

Hello, young historian — I am the Scribe, and I am here to help you understand one of the hardest times in American history! The Great Depression began in 1929 when the stock market crashed. Think of the stock market like a giant store where people buy and sell pieces of companies. When it crashed, people lost their savings overnight. Two big things made the crisis much worse: banks across the country ran out of money and closed, and too many people had borrowed money they could not pay back. Millions of families lost their jobs, their homes, and struggled to find food. Communities fought back by sharing meals, forming soup kitchens, and looking out for neighbors. If you feel lost, ask yourself: what happens when lots of people suddenly have no money to spend?

Activity

Drag each word to show if it is a CAUSE or an EFFECT of the Great Depression.

Practice

Explain the difference between a cause and an effect of the Great Depression.

Describe one way ordinary neighbors helped each other survive the hard times.

Common mistakes to avoid

A world war started in 1929 and caused the Depression.World War II did not begin until 1939; the 1929 stock market crash is what triggered the Depression.
The government immediately sent money to every family.Large relief programs arrived only gradually through the 1930s, not right away.

Check your understanding

What event in 1929 triggered the start of the Great Depression?

Which of these was a CAUSE that made the Great Depression worse?

How did many communities help each other survive the Great Depression?

Recap

The Great Depression began with the 1929 stock market crash, worsened by bank failures and too much borrowing, and caused widespread job and home losses that communities met with soup kitchens and sharing.

Reflect

Why might helping each other matter most exactly when times are hardest?