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The Repercussions Of The 1929 Stock Market Crisis

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The 1929 stock market crisis resulted in significant losses for the American people. It began in September and lasted till mid-November. The repercussions of the crash led to lost salaries and unemployment, businesses closing, homelessness, and many other life-changing events. It also began in New York City at a time when the American people were thriving in life. What caused the 1929 stock market crash? What event or events produced such an economic disaster for America? Could the accident have been avoided? There are several reasons behind the stock crash, but the banks of America may hold some answers.

The article, "The Money Market in 1929" which was written by W. Randolph Burgess, discusses the four major events that affected the money market. The first event was when the Federal Reserve changed its discount rate from 5 to 6 percent. The second event was when foreign exchange rapidly strengthened. The third event was when the money rates rapidly declined in October. Last but not least, when the break in the stock market prices occurred. The result of all of these events is all theories as to why the stock market crash happened. Throughout the article, W. Randolph Burgess discusses how the federal reserve helped with the crash. Towards the end of the article, Burgess …show more content…

Edie supports the theory that Americans borrowed more money than they could pay back. The article "The Banks and the Stock Market Crisis of 1929" helps bring light to New York banks' perspective. It states, "Between October 16 and October 30, brokers' loans for others decreased $1,411,000,000, about 36 per cent (Edie, page 18)." It is considered that the fear of equities dropping prompted the stock market to crash. There are many theories behind that as well. Nobody knows why people suddenly took their funds away. It could be the fear of funds becoming frozen, the need for enough funds to acquire bargains in the stock, or the use of funds to promote firms'

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Leuchtenberg sad, “There was no single cause of the crash and ensuing depression,” [Doc2]. Many things as stated earlier contributed to the crash, such as overexpansion of credit, goods, industries and rising rates of unemployment. Many Americans saw the Stock Market as an easy way to create wealth by buying stocks cheap, usually at a margin, and selling for a higher price, hopeful to profit. Buying on margin was the act of paying some money on a stock, but loaning the rest from a bank who expected would be paid back when profit was made. Stocks became more expensive to the point where nobody wanted to buy them because of their extreme price.

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The great depression in the US, which began in 1929, and ended in 1938 was caused by many different things all happening at the same time in the economy. The wall street crash in October 1929 was one of the main causes, when the stock markets crashed. This was caused by many things, but the main reason for it was a deflation (which is an event where the general level of prices in an economy are reduced) On October 24th (black Thursday), share prices dropped by 14 billion dollars in a day, and more than 30 billion in a week. This forced many of the banks to close, due to them investing their client’s savings in the stock market.

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In 1929, the Nation and around the world was in chaos. The stock market collapse and the economy in the United States was rapidly dropping out of control. Bank began to close due to the fact that the Banks invested money into stocks and at the same American investors were struggling to save what little money they had left. The American people were frantically trying to retrieve their money out to the banks wondering if the banks stole their money. Many American people lost their job and homes.

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On October 29, 1929, the stock market crashed, which led to a large economic depression and dramatically dropped in stock prices. This depression caused people to get scared and not buy any

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The Stock market Crash was one of the causes of the Great Depression. One cause of the Stock Market Crash was the stock exchange. This led thousands of Americans to invest in stocks and lose money. Many Americans borrowed money from the bank to buy stocks. Most of the time, people who lost money were unable to pay the banks back their debt; which caused banks to fail.

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On October 29, 1929 the stock market crashed by 12 percent by the end of the day. Many people realized that Americans was starting to go into an economic depression from this crash.

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Only two months after the crash, stockholders had lost approximately $40 billion dollars. From that point on the United States economy was headed in a downward spiral. According to History.com, by 1932 about 13 -15

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and why did it happen? One of the biggest causes was the market crash in 1929. This was believed to begin the great depression that lasted over a decade. The market crash had caused over nine thousand banks to shut down. Millions of people were left unemployed because of banks shutting down.

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When these stocks crashed banks were left without money and many had to close down. People lined outside of banks for hours to try and get their savings money out. This was impossible since banks did not have enough money. Millions of people lost their savings and were unable to get the money they needed to support their families. This also led to a big rise in unemployment.

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This led to the Wall Street crash where 9 million people lost their savings and ensued in a bank crisis. Consumerism plummeted and failing businesses laid off workers, where around 12 million people were unemployed by 1932 and the unemployment rate was 33% in 1933. “The Crash exposed the weaknesses that underlay the prosperous economy..” (Leuchtenburg) states how the crash revealed the underlying crippled economy the US had and how it completely shattered the economy. The nature of the Depression was caused through a range of causes and the situation deepened from the

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The Stock Market crashed suddenly as a result of Americans abrupt interest in buying stocks. Prospective buyers did not have to pay the full price of a stock in order to purchase it. The practice of "buying on margin" started, it allowed a person to acquire stocks by buying the

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However, as more and more people invested in stocks, some started borrowing money from the banks. Eventually, the stock market was being overused and had reached its limit leading to the stock market crash on October 29, 1929, also known as Black Tuesday (Gale 2). Following the stock market crash, several events drove the United States into the Great Depression. When people began to realize the extent to which the stock market had affected the economy, they started to distrust the economy and the management of the government. Trying to keep their money, citizens started to spend less, which halted economic growth and sent it into decline.

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Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading” ("Stock Market Crash of 1929”, History.com). Stock prices continued to decline and the Great Depression began in the United States. The crash of 1929 was not the only cause of the Depression; however it was a major factor and sped up the collapse of the economy worldwide. By 1933, 15 million people were out of a job and a majority of the United States’ banks had deteriorated ("Stock Market Crash of 1929”,

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There began to be a gradual decline in prices and the stock market ruptured. On October 24, 1929, the infamous “Black Thursday” took place, where stock holders went on a panic selling spree. Things then went from bad to worse, stock prices went down 33 percent. People stopped purchasing goods and business investments decreased after the crash. In the fall of 1930, the first of four major waves

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