Stock Market Crash of 1929
The Great Depression
Leading Up To The Crash and The Crash Itself
Throughout the 1920’s a continual increase took stock prices to peaks never before seen. From 1920 to 1929 stocks more than quadrupled in value.With this continual stock enlargement stock investors were convinced that stocks would not fall; therefore they wanted to invest in more stocks.
In 1929 the stock market hit a low point. In 1932 and 193 the stock market was 80% lower than the peak in the late 1920’s. The demand for goods decreased as the people felt poor after losing their stocks. Nobody could aspire from stock investments anymore because no one would buy the new stock. Then when it was heard that banks had little to nothing to offer, many people rushed to the banks to make withdrawals.
People's Lives / Joblessness and Poverty
Many banks failed, causing working-class families to lose all the money they had in that bank. People who still had their jobs were forced to choose between wage cuts or a pink slip. Twenty-five percent of working Americans were jobless in 1932 and the unemployment rate was around twenty percent for the entire decade. People were starving; soup kitchens and charity lines could not withstand the largely expanding number of middle class citizens lined up outside their doors who had waited hours just for a small meal. People would do odd jobs just to make ends meet and make a little money, and some would wait by landfills for the next load to come along, hoping they could sift through the trash and sell the scraps for money. In addition to this; many people had lost their homes had formed makeshift shelters out of boxes and debris. Some of them were grouped together and called “shanty-towns” or “Hoovervilles” because of President Hoover’s failure to act.
Prices of stocks had been steadily decreasing, but most people just thought it was a slump and the market was being reconstructed. Therefore, people kept buying and selling stocks. The prices of stocks spiralled as millions of them were being sold daily. Stock traders were panicking, and sold nearly 13 million stocks on October 24th, which became known as “Black Thursday”
Bank Failures / Defaulted / People's Bad Finacial Decisions
This turned into a worldwide depression because America’s economy had a large impact on other countries economy across the world. In order to repay debts from World War I, European countries sold their goods to American consumers. However, they had to borrow money from American banks in order to do this, and when the American banks failed, the European countries could not borrow money to sell their goods; therefore, they could not pay back their war debts, which caused a worldwide depression. The loans slowly disappeared and other countries could not spend as much money.
Within the decade, farm income decreased. Industries declined as well. Before the crash ever came to be, the automobile and constriuction industries were dwindling because they could not fulfill many orders; therefore, employee wages were cut, and many workers were laid off. In the midst of the Great Depression, the gap between the rich and the middle class was continuously growing. "In 1929 less than 1 percent of the population owned nearly one-thrid of the country's wealth." Seventy-five percent of Americans were at the bottom of poverty.
Women At Work