The Stock Market crash happened on October 29, 1929 and the Great Depression started in 1929 and ended in 1939. In the end of September and the beginning of October stock prices began to decrease. The crash was caused by the nervous investors which sold 16.9 million stocks on the New York Stock Exchange in one day. Many businesses invest most of their money in the stock market to make more money, but when the stock market crashed, so then businesses had to shut down because they have no money. Most of the nation’s banks also failed because they had to put the depositors money in the stock market to increase but when it crashed people lost most of their money.
The stock market crash had a colossal contribution to the Great Depression. The stock market crash rolled in after the golden time in the 1920’s; with it came the Great Depression trailing right behind. The stock market crash was caused by people investing in stocks with money they did not have, this was called buying on margin. When the stocks fell everyone lost an enormous amount of money that they had invested into the stocks. The stock market was the main cause that forced American into the Great Depression.
The people that were affected the most by the Great Depression were stockholders. Thousands of stockholders lost enormous amounts of money on Black Tuesday. The rapid decrease of stock prices made stockholders lose their money within one day. Even though it was a devastating loss, there was no way to predict it. From 1925 to 1929, the average stock price doubled on the New York Stock exchange, making people invest ludicrous amounts of money in the hope that they would make a hug... ... middle of paper ... ...hange crash of October 1929 and therefore the succeeding depression alerted stockholders to be concerned about their own investments within the stock exchange instead of the data of other people’s investments.
“The result was drastically falling output and drastically rising unemployment; ... ... middle of paper ... ...its were contracting it; The Fed's inaction was the reason why the initial recession turned into a prolonged depression; The economy continually sank throughout Hoover's entire term. Under Roosevelt's New Deal, it rose five out of seven years. Attempts to blame Big Government for the Depression do not withstand serious scrutiny; The Smoot-Hawley Tariff had a minor impact because trade formed only 6 percent of the U.S. economy, and reducing trade gave Americans only that much more money to spend domestically. Hoover's other attempts at government intervention came mostly during his last year in office, when the Depression was already at its depth; The first nations to come out of the Great Depression were Sweden, Germany, Great Britain, and then everyone else did so after they adopted the Keynesian solution of heavy deficit government spending and the Keynesian economic policies have eliminated the depression from the world's economies in the six decades that have followed. Works Cited WWW.huppi.com WWW.english.uiuc.edu Nelson Cary Kennedy, David Freedom From Fear: The American People in Depression and War Oxford, New York 1999 Oxford University Press
On this day, panicked investors sold a total of 16 million shares in response to an eleven percent drop in the Dow, an average of the prices of all stocks. These drops of value in the Dow continued for the next three trading days, leaving the Dow down over 25 percent and down $30 billion in market value in a four day span. This drop came after a 20 percent drop over the past two months, making the crash even worse. This triggered the worst economic depression in American history, The Great Depression. The stock market caused this depression because of something called “buying on margin.” Buying on margin was a phenomenon that occurred in the Twenties where people would borrow money from brokers to buy stocks.
But when banks started to crash that is when people started to panic and was trying to get their money back, millions of Americans lost fortunes. This caused companies to lose their values and no longer be able to afford to stay in business. William C. Durant joined the Rockefeller family and other financial giants to buy big stocks to prove to the people their assurance in the market but they failed to stop decline in prices. According to the website Globalyceum, US gross domestic product, in 1929 $103.6 billion, in 1930 $91.2, in 1931 $76.5, in 1932 $58.7, in 1933 $56.4. The total size of the American economy, restrained by gross local product, suddenly dropped following the crash on Wall Street from $103.6 billion to $66
They had purchased stock in companies whose shares were now crumbling in value” (Ayers 678). After the stocks crashed, people who were invested in them, lost thousands even millions of dollars. The banks were the top investors so they lost the most amount of money with their invested stocks, along with the frightened depositors withdrawing their savings, draining money quickly from the bank. Hundreds of banks failed and shut down because of their loses. CLOSING STATEMENT: although, … Businesses were also affected by the Stock Market Crash.
The crash has started; everyone began selling because the earnign ratio was so high, but no one was buying. The more that was sold, the less the value, and bankers had to buy the stocks as they fell to try and slow them down before they hit rock bottom. The root cause of this was Dow Jones Industrial, one of the leading companies to invest in at the time. Because of their fall, many Americans lost money, everyone was trading. The market sold 12.9 million shares lost $5 billion dollars, and this was all over the course of one day.
The nineteen-twenties is most commonly known because of the Great Depression., But in two thousand-eight, there was also a stock market crash, known as the sub-prime crash, along with the housing market falling a bit itself as well. Bet you did not even hear that, and if you did it probably was not much. Both of these major markets where a result of society’s careless spending habits. The self indulgence of the nineteen-twenties and the great depression affected the Instant gratification of the two thousands so much that it caused a relapse in history causing the stock market crash of two thousand and eight. The stock market is where you buy or sell stocks in a company.
Big banks were in trouble as well, many investing recklessly in the stock market then losing it all when the stock market crashed in 1929. The fourth factor was Americas position in the international trade market. In the late 20's, Europe's demand for American goods began to decline, partly because their industry was becoming more productive and partially because their economy was destabilized from the international debt structure that emerged in the aftermath of WW1. The international debt structure was a fifth and final factor contributing to the Great Depression. At the end of the war in 1918, all the European nations that had been allied with the US owed large sums of money to American banks and could not repay them with their shattered economies.