Stock Market Crash & the Great Depression Mr. Koch US History B Forest Lake High School.
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Transcript of Stock Market Crash & the Great Depression Mr. Koch US History B Forest Lake High School.
Stock Market Crash &the Great Depression
Mr. KochUS History B
Forest Lake High School
Warning Signs
• Uneven prosperity of the 1920s– Was primarily rich getting richer• Often saved or invested
Warning Signs• Overproduction– Production outpaced demand• Caused some industries to slow
• Buying on credit– People buying what they
couldn’t afford• Payment plans
Warning Signs
• Playing the stock market– Optimism fueled hopes to “get-
rich-quick”• Over-speculation
– Included many ordinary people investing more than could afford• “buying on margin”
– borrowing $$$ to pay for stocks
Warning Signs• Problems for farmers– Decline in demand after
WWI led to decreasing prices• Couldn’t pay debts for land/machinery
• Problems for workers– Many still worked long hours for low wages in bad conditions
Stock Market Crash of 1929
• With investment craze, stock prices rose to all-time high in Sept 1929– Many prices inflated well over real value of
earnings
Stock Market Crash of 1929
• Black Thursday – Oct 24, 1929– People became worried, began to sell, prices
dropped
Stock Market Crash of 1929
• Black Tuesday – Oct 29, 1929– Panicked investors sold off stocks
like crazy• Prices collapsed
– $30 billion in total losses– Many people lost everything • Some lost even more
– Was the “trigger” of the Great Depression (not the sole cause)
The Fallout
• As profits decreased, factories closed & people lost their jobs– With less $$$ to spend, more businesses were
hurt and/or closed
The Fallout• Banks– Nervous Americans tried
to withdraw deposits in large numbers• Many banks failed and
closed – people lost their money
The Fallout
• Global economy was connected to U.S.– European economy was hurt
• In addition, there was no govt “safety nets” for people to fall back on