Life in the Roaring Twenties

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How did the banks add to the problems facing farmers?

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A powerful example of a time when both banks and farmers suffered was the Great Depression.  The Dust Bowl occurred in the American Midwest during the 1930s.  A long drought caused the soil to dry out.  Poor farming practices also led to the soil problems.  Winds lifted the topsoil, causing massive dust storms.  Farming was nearly impossible during this time.  At the same time as the Dust Bowl, the American economy was severely weakened due to the Great Depression.  

After one bad harvest, farmers began to suffer financially.  They did not have crops to sell in order to support their families, pay their mortgages, pay farm hands, pay for upkeep, etc.  

During the 1920s, many farmers took out bank loans to pay for additional farmland, building supplies, and farm equipment.  They used the farmland they already had as collateral for these loans.  After poor harvests, farmers could no longer afford to make payments on the loans.  Banks would sometimes seize their assets.  Many farmers went into foreclosure and lost their farms.

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