How did the Great Depression Start? Learn all about the Great Depression for kids

How did the Great Depression Start? Learn all about the Great Depression for kids

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[Music] the Great Depression for kids hey kids by now you probably know a little bit about what money is and how adults need to earn money to pay for things like food housing cars and fun stuff like traveling and buying toys and games for good kids like you most adults earn money by working at a job and of course there are thousands of possible jobs like being a nurse or a doctor driving a
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truck or a cab working for the government or tending to a store and maybe you've heard about something called the economy which is basically an overall measure of how well everybody in the country is doing when it comes to making money and being able to afford to buy and sell things and services to each other sometimes the economy is doing really well and sometimes it's not when the economy is doing well the stock market is usually doing well too when
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people invest their money in companies they purchase stock in the company stocks are sold as shares or you buy shares of stocks in a company they are called shares because when you invest in a company you share in the profit and the loss of a company the more profit a company makes the more valuable your share of stock becomes and the more money you earn a stock market is a place where stocks and bonds known together as investments are bought and sold when
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companies are doing well and the economy is strong more people trust those companies and the entire country will continue to do well so they feel comfortable putting their money into stocks and bonds they hope that as the economy continues to grow they'll get more money back than they put in thus making a profit on their investments well October 24th 1929 was a day nobody will ever forget when it comes to the stock market because that's the day it
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crashed not crashed like a way a car crashes but crashed as in went down a lot people who had put a bunch of their money into the stock market lost almost all of it in just one day the result of that crash in the years that followed is what historians now call the Great Depression a period when the country struggled economically people couldn't afford things lots of Americans had to go without jobs or even a way to make
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enough money to survive but first picture this imagine you and two other friends decide to give some money to another friend let's call him Quinn because Quinn is starting a business that everyone thinks is going to make a lot of money hopefully Quinn is a good friend since you have to trust someone a lot to give them your hard-earned money so the three of you you and your friends now own stock in Quinn's company and are hoping that this company does really well so you can earn some money back on your
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initial investment but what if Quinn stock price is suddenly much higher than the actual value of the business and what if the business doesn't do well what happens if everyone who has stock in Quinn's company including you and your three friends decide to sell their stock at the same time if that happened Quinn's company would suddenly plummet in value and everyone involved would lose all their money that's kind of what happened during the stock market crash of 1929 before the crash Americans were buying a lot of stock in companies but
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they soon realized that companies they were buying into weren't really making enough money because people were buying and selling as much stuff as they used to so on October 24th of that year many people who own stock panicked and sold it causing the crash almost 13 million shares of stock were sold on one day and that became known as Black Thursday a few days later on black Tuesday 16 million shares were sold the chain
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reaction of the sudden selling hit Europe - the Great Depression was in motion so what was the result of this Great Depression well you can be sure it wasn't anything but a great time for Americans farmers were partaking hard hit because of advancements in machinery farmers have been experiencing a bumper crop for years before the Great Depression producing a lot of products for consumers to buy but because they had so many crops and there was too much
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to go around the prices started falling this was made worse by the stock market crash suddenly farmers simply couldn't earn a living then in a terrible coincidence there was a terrible drought in the Midwest year after year with no rain and all the farms started drying up farmers went from having too much product with falling values to having no crops at all many farmers lost their farms during that time the Midwest got
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the nickname the Dust Bowl because as the drought worsened farms turned to dust strong winds kicked up all that dust choking the cattle and other livestock living there 60% of the population of the Midwest had to leave during the so-called Dust Bowl to make matters worse for the country before the 1929 crash people in the US were buying things like cars radios washing machines and other home products on credit for the first time meaning they could buy
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the products without cash using credit cards and pay for them later when they couldn't make the payments on the stuff they owned people were suddenly in debt those who were once rich became poor because they owed more money than they were making 10,000 banks failed and people lost their life savings the government didn't help to protect the banks so there was nothing anybody could do also the US was owed money from other countries that borrowed from us after
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World War 1 but they couldn't pay us back what do you think you would do if you suddenly lost all of the money you had saved up for years and there wasn't anything anybody could do about it no wonder they called it a depression a lot of Americans blamed a situation on our 31st President Herbert Hoover who had taken office earlier that year at the time people were forced to live on the streets in groups of shacks called shantytowns those shanty towns were nicknamed Hooverville can you
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imagine living on the streets and not in a house or apartment what do you think that would be like besides to homelessness there were other problems during the Great Depression by 1932 25 percent of the population or 30 million people have lost their source of income 300,000 companies went out of business children who were once in school had to stay home to work and try to help their families earn money by
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working in canneries factories or mines how do you think your life would be different if you had to work instead of going to school there was suddenly a growing gap between the rich and the poor the hardest hit area of the country was the Midwest where there were a lot of farmers up to 200,000 people moved to California even leaving behind older kids to fend for themselves on the farms people had to come up with unique ways to make and save money during the Great Depression
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some started sowing their own clothes growing their own food postponing marriage having fewer babies even using vacant lots in the city to plant gardens anything to get by some families of six had to get by on just $5 per week here's some perspective these days $5 buys one large cup of coffee at a fancy coffee shop most movies cost more than $5 to get in because going out was
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expensive during the Great Depression people had to find different ways of having fun staying in and listening to baseball on the radio became a favorite pastime as did collecting stamps or hanging out and talking to neighbors on the front porch board games like monopoly which was invented in 1933 became popular as did cart games like old made when people went out they went to movies had picnics played bingo went to church had social
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events played mini golf or went to the drugstore counter for a soda simple pleasures though people were struggling financially they always tried to make the best of tough times if you had no money to spend he'd find ways to have fun that were inexpensive too despite these attempts to make the most of a bad situation the Great Depression took its toll on Americans a lot of people who once worked and earned good money were suddenly embarrassed by their lack of
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ability to get a paycheck many during this time blame themselves for their predicament rather than the economy around them it wasn't until 1932 when the u.s. elected a new president Franklin Delano Roosevelt that's some optimism started to return to the country within a hundred days of being elected FDR signed something called the New Deal which was his attempt to end the depression and bring prosperity back to the u.s. to this day FDR is considered
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one of our best presidents the New Deal was a whole new way for the government to inject hope into the economy and lift people up Roosevelt created 42 new agencies and laws and pushed Congress to pass them many of these agencies still serve the people of the United States today among these new government services was Social Security which funded retirement for older Americans and provided other programs for people who were unable to work the Securities and Exchange
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Commission helped prevent fraudulent or illegal activities in the stock market there was the Federal Deposit Insurance Corporation to protect against future bank failures the Civilian Conservation Corps hired 3 million people to plant forests build flood barriers and maintain roads the Securities Act required companies to provide financial information to potential investors before issuing stock the New Deal also ended prohibition which was a ban on the
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sale of alcohol and instead taxed those sales to raise money there were also programs to protect people from losing their homes fund construction projects and pay farmers to plant beneficial crops there are still a debate today about whether the New Deal was responsible for ending the Great Depression still it's clear that out of a bad situation came a resurgence of optimism and we eventually lifted ourselves out of a terrible time in
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history clearly the episode known as the Great Depression proved the resilience of the American people and our ability to solve whatever problems come our way thanks for following clarendon learning be sure to subscribe for more free resources check us out at clarin and Learning org

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