The Stock Market Crash
The Great Depression
The Stock Market Crash of 1929 devastated the economy and was a key factor in the beginning of the Great Depression.
- Causes: The twenties were a time of the "bull market" or "economic boom", this led to millions of Americans speculating in stocks with people borrowing money to buy more stocks. There was more money out on loan than the entire amount of currency circulating in the US at the time. Then, on October 24, 1929, the New York Stock Exchange collapsed and continued to fall for a whole month. This is called a 'bear market".
- Characteristics: It is the worst market crash in history. The Dow Jones (an indicator of stock market prices) lost $30 billion in a week.
- Significance: By 1933, nearly half of Americas banks had failed, and unemployment was approaching 15 million people. It took World War II and the massive production of armaments to finally bring the country out of Depression after a decade.