Weaknesses in the Economy

African Americans particulary bad. Sharecroppers (work for farmers, not paid but given land to provide crop for family) Settled in Harlem, 42% higher death rate

George Shayler (African-American Intellect)- Reason why depression didn't have an impact on negros like it did on whites was because they were in the depression all the time

Divides between rich and poor- combined wealth of top 1% equated to 42% of bottom- Maldistribution

Brookings institute 1900-1930= 70 million below poerty line

Really bad business- Construction-1926- Florida Land Boom

Coal Mining

Textiles- Women wearing less e.g. shorter skirts and flapper dresses- Discovery of Synthetic fabircs e.g. Rayon

Farming-

• Over-production
• Due to prohibition- grain was not being used for alcohol
• Europe doesn't need it as much
• Use of tractors- efficient
• Fertilisers helped to produce more
• Competition from abroad increased- Canada and Argentina

John Freeman- 'The capacity to produce had out ran the capcity to consume'

Saturated Market

Not enough consumers

Europe struggling due to the effects of the war

China- Political unrest- Can't trade

Russia- Communist- Can't trade

Farmers wanted them to buy excess

McNarry- Haughen Bill-1926- Coolidge got rid of it as it went against Lassiez-Faire

Tariffs- Low taxation used, rich get richer-Retalliatory tariffs meant that they could not sell left over produce abroad

Lassiez-Faire- Government would not intervene in struggling industries, -only 1/3 of banks were regulated

David Kennedy- 'The banks were rotten, even in good times'

40 banks a day closed-1932

A run on the bank- people wanted thier money back

Problem was they were too small and too many- 30,000- 1929

1/3 of banks under federal reserve