The decrease in cotton and oil prices in Texas at the beginning of the Great Depression can be attributed to a combination of factors linked to oversupply and economic instability. Specifically, farmers and refinery owners responding to falling prices by producing more in hopes of making up for losses led to an overproduction scenario, which further drove prices down.
The responses provided can be analyzed as follows:
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Government Orders and Production Surpluses: The option stating "Farmers and refinery owners often went against government orders to produce high surpluses to make up for profit losses" likely aligns closely with the reality of the Great Depression. Faced with declining prices, producers may have attempted to compensate by increasing production, despite potential government regulations aimed at controlling supply.
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Federal Relief Funding: The option stating "Farmers and refinery owners received no federal relief funding during the Hoover administration" reflects the limited government intervention during the early years of the Great Depression. This lack of support contributed to the economic struggles of producers, who were unable to stabilize their income through external assistance.
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Labor Practices: The mention of firing Black and Mexican American workers to provide jobs for White laborers hints at the socio-economic pressures faced by labor markets during this time, but this issue is less directly related to the overall prices of cotton and oil.
Given these analyses, the most relevant responses to the question of why cotton and oil prices dropped would relate to the overproduction by farmers and refinery owners, and the lack of federal relief funding during the Hoover administration, which created an environment where economic instability and falling prices were exacerbated.
Overall, the price drops stemmed from a combination of excess supply, falling demand during the economic downturn, and insufficient government support to stabilize the agricultural and oil sectors.
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