The effects of the Wall Street Crash were felt all around America as people starved, businesses became bankrupt and unemployment rose. This era was known as the Great Depression and would last for another ten to twenty years.
In the short term, rich investors lost great deals of money. Whilst, poorer investors, who had borrowed ‘on the margin’, could not repay their loans and thus became bankrupt.
After a while, these incidents began to affect the American public. Firstly, unemployment rose as industries sunk into decline. The 14 million unemployed was a stark contrast to the 1.5 million unemployed in the 1920’s. To make things worse, wages across the country began fall rapidly as people became more and more prepared to work for less.
This led to many impoverished families being forced into homelessness, poverty and starvation. Every town had a so-called Hooverville, a shanty town of ramshackle huts where migrants lived, while they searched for work. In these Hoovervilles, conditions were unsanitary and disease spread easily. Many of these people lived on food provided by charities, but by 1932, the Red Cross, for example, could only give 75 cents a week to each family.
A banking crisis then swept across America, as the confidence of the American public fell. In 1929, 659 banks failed due to unpaid loans. As a result people stopped trusting banks and withdrew their savings. This in turn led to more banks failing.
People in agriculture were hardest hit by the Depression because the 1920’s had not been kind to them anyway. Many farmers had their land and homes repossessed, as they could not afford to pay back their mortgages and loans. Furthermore, since areas in the Southern States had been over cultivated, the land became less and less fertile and a Dust Bowl arose. Many of these ruined farmers travelled to California to find any labouring work.