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Causes
A crisis occurred in the farm sector when they produced more than they were able to sell. The farm crisis worsened when World War I markets disappeared. The farm sector was also hit with a multiple year drought that led to crop shortages and eventually the ―Dust Bowl‖ The availability of easy credit with many people going into debt buying goods on the installment plan and not being able to pay for them. Over speculation in the stock market with investors buying on an easy margin system. An unequal distribution of income in which there was to little money in the hands of the working people. An old and decaying industrial base in which outdated equipment made some industries less competitive. A falling demand for consumer goods as a result of many of the above causes.
Consequences
The American economy collapsed. The world economy collapsed. Many of the urban poor lived in ―shanty towns‖ Many of the urban poor ate in soup kitchens and bread lines. African American experienced increased discrimination. Latino Americans experienced increased discrimination. Many farmers lost their land and moved west. Unemployed wandered the country looking for work. As much as one third of Americans were out of work. Women cutback on household spending. Women lost their jobs. Many people starved. Children experienced malnutrition and other health problems. Children left school and started working to help their parents make ends meet. The federal government created many New Deal programs to put people back to work.