Great Depression- Anna L.

Dear 5th Graders,

 

You may have heard about the Great Depression before. It was a time period where the United States was in a very bad economic state. Many people lost money and their jobs. The Great Depression was caused, because new inventions were made that helped farmers produce more goods. This caused farmers to not hire as many people to work on the farm, because machines could do a lot of the work. This also made crops cheaper to buy because more crops were being produced. Farmers lost a lot of money, because the prices of crops were lower.

Also fewer people were buying things from factories. This meant that they didn’t need as many people to work in the factories. More goods were being made then bought by consumers. For example, fewer people were buying cars because they had less money so they didn’t need workers to make more cars. Many companies fired workers and paid them less money.

The rich people became richer and the poor people became poorer. Banks lost people’s money that they put in the bank.┬áPoliticians reduced taxes on the rich because they thought that money from wealthy people would trickle down to lower class people. Most of the money in the U.S. was owned by a few people, and the rest were poor.

The United States also reduced trade with other countries, because there were high taxes on goods being imported. The U.S. used to lend money to other countries, but they could no longer lend money to other countries because our banks were running out of money.

People were buying goods on credit, which meant they were spending money they didn’t have. They were supposed to pay it off later but few people did. They kept buying goods and owed the bank more and more money. Interest, money charged for not paying off your bill, accumulated and people soon couldn’t pay off their bill.

Anna Lee

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