Stock Market crash Homeless starving families roaming the streets, billions of dollars lost never to be returned, and darkness and depression encompassing all aspects of life. This may sound like an impossible nightmare, but in reality millions of people suffered through these events thinking only of survival and how to get through the next day. What, could cause such horrendous events as these? Well, all of this was a result of what is known as the Stock Market Crash of 1929. In brief, the economy of the United States of America failed due to flaws within the market, and misunderstandings of its risk. Moreover, poor economic policies caused depression and financial turmoil, and took years of political reform to heal. When looking at …show more content…
The most obvious and broad effect of the stock market crash would be the notorious Great Depression, but one must delve deeper than this to understand the full range of damage. On one single day which is known as Black Tuesday (October 29, 1929), eight to nine billion dollars were lost. That however, doesn’t even scratch the surface of damage. For example, 30 percent of the United States population had become unemployed. This in turn, meant that nobody could afford home payments which lead to the crash of the housing market. Men, women, and children were all forced out onto the streets, trying to fend on their own, even in many cases without access to an income. In total, 30 million people had lost their source of income. These dire circumstances lead to the creation of numerous shack towns also known as “Hoovervilles”, which were named after the unpopular president of the time period. These towns were endless expanses composed of homeless people, including twenty-five thousand families. Nobody was safe to any degree, young or old. Teenagers who feared being a burden on their financially depressed parent would run away and ride the rails. Dedicated students who worked hard to obtain a degree and would be in a good position to obtain any desired job today were scrounging …show more content…
It has all come full circle, starting with the hopeful and false belief that the stock market was the eternal giver of infinite and safe wealth, along with how truly worthless those stocks actually were because of such high inflation. From there, the horrendous effects crashed down upon the United States with multitudes losing there’s jobs, many becoming homeless and struggling to survive, all while billions of dollars were lost often never to be seen again. Finally, things began to settle down as a new political era was ringed in, with reforms for economics, politics, banks, and workers’ rights being pushed through congress left and right. Drawing upon all of this information, it is hard to even fathom living for a single moment in the time period of the stock market crash along with the resulting Great Depression. That is why I ask you the reader, to try and picture what your life would have been like if you had grown up during this time. It seems like something that happened thousands of years ago because of how unreal and different things were then. It’s almost impossible for someone in the modern world to picture starving families on the streets and whole towns comprised of makeshift huts to house all of those who have been effected. However,
The stock market crash of 1929 is one of the main causes of the Great Depression. Before the stock market crash many people bought on margin, which caused the stock market to become very unbalanced, which led to the crash. Many people had invested heavily in the stock market during the 1920’s. All of these people who invested in the stock market lost all the money they had, since they relied on the stock market so much. The stock market crash also played a more physiological role in causing the Great depression. More businesses became aware of the difficulties, which caused businesses to not expand and start new projects. This caused job insecurity and uncertainty in incomes for employees. The crash was also used as a symbol of the changing times. The crash lead the American peop...
Nextly, the stock market crash also caused the economic fallout which resulted in the Great Depression. Because “Black Tuesday” wiped away billions of dollars and thousands of investors, it caused a great amount of economic fallout. When “Black Tuesday” struck Wall Street on October 29th, 1929, investors traded 16 million shares on the the New York Stock Exchange in just a day which caused billions of dollars to be lost and thousands of investors who got all their money wiped out. After the fallout of “Black Tuesday” America’s industrialized country fell into the Great Depression, which was one of the longest economic downfalls in the history of the Western industrialized world.
Frederick Lewis Allen’s book tells in great detail how the average American would have lived in the 1930’s. He covers everything from fashion to politics and everything in between. He opens with a portrait of American life on September 3, 1929, the day before the first major stock market crash. His telling of the events immediately preceding and following this crash, and the ensuing panic describe a scene which was unimaginable before.
The stock market crash was a result of rapid growth, and banks and lenders overextending loans and investments. Overextending loans and investments resulted in factories shutting down, banks closing, people losing their life savings and millions of Americans out of work, thousands starving and homeless. The rural areas of America were much luckier than the urban in that they were not hit as hard by the depression, they were still able to grow their crops, raise their animals and continue on with life as normal for the most part. In 1930 a severe drought struck America which only helped to make the Great Depression worse for all of America, including those in rural areas with farms as it effected their ability to grow crops and water their animals. The droughts effected those in the Great Plains and their surrounding areas the most. For years the lands had been stripped of its natural vegetation and soil had been overworked to produce crops, mainly wheat in large amounts. Overworking the land caused it to lose its vitality, leaving no sod to hold the sand or powdery dirt down. Without rain these problems were just exasperated, vegetation was unable to grow back to replace what was
The years berween 1929 and 1933 were trying years for people throughout the world. Inflation was often so high money became nearly worthless. America had lost the prosperity it had known during the 1920's. America was caught in a trap of a complete meltdown of economy, workers had no jobs simply because it cost too much to ship the abundance of goods being produced. This cycle was unbreakable, and produced what is nearly universally recognized as the greatest economic collapse of all times. These would be trying years for all, but not every American faced the same challenges and hardships. (Sliding 3)
There is no doubt that the stock market crash contributed to the great depression, but how? One way that the Crash contributed to the depression was the loss of money it caused to the average man. It is believed that in the first day of the crash almost a billion dollars were lost, this took a large amount out of the pocket of the common man. Without this money people were unable to purchase consumer goods, which the United States economy was based on. Another way the Crash contributed to the depression was the loss of confidence in the market. When t...
The cause of this was the Stock Market crash in 1929. Many investors in the stock market panicked and sold all their stocks. The results of this include frightened Americans withdrawing all their savings, causing and hoarding it in their homes, many banks to shut down and less money to circulate in the economy. Although the economy had taken a dramatic blow, there was hope. A new program was administered by the government to help people suffering from the depression.
The Great Depression was the worst economic collapse in the history of the industrialized world that affected everyone from children to elders. The social values of consumerism and isolationism that impacted the way that average Americans behaved was a huge part of what caused the collapse of the global economy. The stock market crash of 1929 set off the Great Depression. Economists also blame the overproduction and underconsumption of consumer goods and food. The doubtful state of the foreign balance and the world’s economy played a role in provoking the collapse as well. The Great Depression was launched due to a chain reaction of social causes, over speculation in the stock market,
A result of the Stock Market Crash of 1929 was many, many bank failures. These banks failed because, the Stock Market Crash of 1929 was the cause of debt and poverty for many people. People had no money to pay back the banks, and no money to deposit into the banks. Whatever money was left in the banks got withdrawn because people were afraid that they would lose it, just like others lost all their money to the market crash. By 1933, 11,000 of America’s 25,000 banks had closed and weren’t in existence
October 29th, 1929 marked the beginning of the Great Depression, a depression that forever changed the United States of America. The Stock Market collapse was unavoidable considering the lavish life style of the 1920’s. Some of the ominous signs leading up to the crash was that there was a high unemployment rate, automobile sales were down, and many farms were failing. Consumerism played a key role in the Stock Market Crash of 1929 because Americans speculated on the stocks hoping they would grow in their favor. They would invest in these stocks at a low rate which gave them a false sense of wealth causing them to invest in even more stocks at the same low rate. When they purchased these stocks at this low rate they never made enough money to pay it all back, therefore contributing to the crash of 1929. Also contributing to the crash was the over production of consumer goods. When companies began to mass produce goods they did not not need as many workers so they fired them. Even though there was an abundance of goods mass produced and at a cheap price because of that, so many people now had no jobs so the goods were not being purchased. Even though, from 1920 to 1929, consumerism and overproduction partially caused the Great Depression, the unequal distribution of wealth and income was the most significant catalyst.
The stock market crash of 1929 was the primary event that led to the collapse of stability in the nation and ultimately paved the road to the Great Depression. The crash was a wide range of causes that varied throughout the prosperous times of the 1920’s. There were consumers buying on margin, too much faith in businesses and government, and most felt there were large expansions in the stock market. Because of all these positive views that the people of the American society possessed, people hardly looked at the crises in front of them.... ...
] This catastrophic event is caused by the accumulation of a large scale of speculation by not only investors but also banks and institutions in the stock market. Though the unemployment rate was climbing during the 1920s and economy was not looking good, people on Wall Street were not affected by the depressing news. The optimism spread from Wall Street to small investors and they were investing with the money they don’t have, which is investing on margin as high as 90%. When the speculative bubble burst, people lost everything including houses and pensions. The main reason ...
What started these tragic ten years were really the events categorized under ‘economic factors’. The economy went into a downward spiral, first, with the Stock Market Crash of October 29, 1929, nicknamed “Black Tuesday” (PowerPoint). The cause of this was actually many factors all happening within a few months. Many companies went bankrupt from overproduction of goods and started stockpiling them. They assumed the economy will keep rising like it did during the “Roaring Twenties”; but when Europe started to mend from the destruction of the war, the demand for products went down. In addition, on October 29th, the value of the stocks became overpriced, and everyone wanted to sell while they were ahead. The sheer number of stocks on the market lowered their value so much, that the price afterwards was only a fraction of what it was before. However, it was not just the Stock Market Crash that overturned the economy, but the farmers also had trouble coping. In the early 1930’s, a massive drought swept through the prairies and the central US, killing off anything that...
In early 1928 the Dow Jones Average went from a low of 191 early in the year, to a high of 300 in December of 1928 and peaked at 381 in September of 1929. (1929…) It was anticipated that the increases in earnings and dividends would continue. (1929…) The price to earnings ratings rose from 10 to 12 to 20 and higher for the market’s favorite stocks. (1929…) Observers believed that stock market prices in the first 6 months of 1929 were high, while others saw them to be cheap. (1929…) On October 3rd, the Dow Jones Average began to drop, declining through the week of October 14th. (1929…)
When the stock market started failing, many factories closed production of all types of goods. Businesses and banks started closing down and farmers fell into bankruptcy. Many people lose everything, their jobs, their savings, and their homes. More than thirteen million people are unemployed. The Great Depression caused major political changes.