Question

Analyze why cotton and oil prices dropped in Texas at the beginning of the Great Depression. Responses: Farmers and refinery owners received no federal relief funding during the Hoover administration. Farmers and refinery owners received no federal relief funding during the Hoover administration. Farmers and refinery owners were allowed by state and federal governments to produce large amounts of these natural resources to make up for profit losses. Farmers and refinery owners were allowed by state and federal governments to produce large amounts of these natural resources to make up for profit losses. Farmers and refinery owners had to fire Black and Mexican American workers to provide jobs for White laborers. Farmers and refinery owners had to fire Black and Mexican American workers to provide jobs for White laborers. Farmers and refinery owners often went against government orders to produce high surpluses to make up for profit losses.

Answer 1

The drop in cotton and oil prices in Texas at the beginning of the Great Depression can be analyzed through a combination of economic, social, and governmental factors. While each of the responses provided touches on different elements, some are more closely related to the underlying causes of the price drop than others.

1. Lack of Federal Relief: The Hoover administration was known for its limited response to the economic crisis, especially in terms of direct relief for farmers and refinery owners. Since no federal relief funding was available during this time, many agricultural and industrial producers, including those in Texas, struggled to maintain their operations and cash flow. This lack of support could have exacerbated financial stress, leading to increased production in hopes of recouping losses—ultimately contributing to a surplus that drove prices down.

2. Surplus Production against Government Orders: Farmers and producers often attempted to boost their output in an effort to mitigate losses from falling prices. Despite government efforts to stabilize prices through supply control measures, many farmers produced high surpluses, trying to attain profits from volume rather than price. This overproduction directly contributed to a further decline in prices for both cotton and oil, as supply outstripped demand significantly.

3. Labor Issues and Racial Dynamics: The decision to fire Black and Mexican American workers in favor of White laborers reflects the racial tensions and economic dynamics of the time. While this may have provided jobs for some White workers, it did not address the broader economic issues facing the industry. The reduction in a diverse workforce could have disrupted production efficiency and further complicated labor relations within the agricultural and oil sectors.

In summary, the drop in cotton and oil prices can be primarily attributed to overproduction as farmers and producers sought to make up for losses, coupled with the lack of federal support during the Hoover administration. The social dynamics concerning labor relations also played a role but were more symptomatic of the larger economic issues rather than primary causes of the price drop.