Farmers In The 1930's

Farmers were affected mainly by the drought, competition, and the reduced spending of consumers. There was significantly more farmers during the 1930’s, approximately 24.8 percent of Americans lived on farms. Given this, the importance of farmers was high because they had serious effects on spending, employment, and production of goods. The drought appeared in the US and lasted for a couple of years. With it, brought little rainfall and high winds that destroyed the crops which made it hard to regrow because due to the high winds the soil became light and not fertile enough. In order for the farmers to make the same amount of profit they were before the drought came, they would have to grow at the same rate. To do that, the soil must be thick

The farming equipment was made in such large amounts due to the technological advances at the time. The manufacturers expanded their purchasing because due to the growth of the installment plan- a credit system where payments for merchandise or items are made in installments over a pre-approved period of time- but were left with these large inventories because of consumers having less money to spend. This was all a result of the many bank failures. The banks that had been fortunate enough to survive during 1931 were in very weak positions now. They were in weak positions because clients lost trust in their banks and wanted to withdraw all their funds. This caused trouble for the banks because they normally only hold a fraction of customers deposits at one time in cash. The only way for banks to get this amount of money is to liquidate it loans and sell their assets. So, that is just what the banks did, and in doing so bank panics were caused. This is not good for the economy or their clients because the banks have no money to lend out or invest. An example from 1932 is when the first bank closed without any prior warning to the