The stock Market is defined by The Economist Times as a place where shares of public listed companies are traded. This is the primary market where companies float shares to the general public at an initial public offering to raise capital (The Economist Times). According to the U.S. Securities and Exchange Commission, stocks are a type of security that give stockholders a share of ownership in a company. Investors buy stocks for different reasons but primarily because of capital appreciation, dividend payments, and the ability to vote shares and influence the company (U.S. Securities and Exchange Commission). There are different reasons why companies issue stocks and they are to get money to pay off debts, launch new products, and expand
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One of the negative effects of the 1929 Stock Market Crash on the country is that it led to the failure of banks. According to PBS, there was chaos in the banking system as banks tried to collect on loans made to stock market investors whose holdings were now worth little or nothing at all (PBS). What made the situation worse is that many banks had themselves invested depositors’ money into the stock market. When it was heard that the banks’ assets contained huge uncollectable loans and almost worthless stock certificates, depositors rushed to withdraw their savings (PBS). As banks were unable to raise funds from the Federal Reserve Systems, they began to fail by the hundreds in 1932 and 1933. Another negative effect is that the stock market crash was one of the causes of the Great Depression. According to the History channel, the stock market crash of 1929 was not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse of which it was also a symptom. It is then stated that by 1933, nearly half of America’s banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce (History). According to PBS, depositors had seen $140 billion disappear when their banks failed. Businesses could not get credit for inventory. Checks could not be used for payments because no one knew which checks were worthless and which were sound (PBS). Another way the stock market crash had a negative effect on the people is that according to an article published by the George Washington University, many people were upset they could not find jobs and the suicide rates increased from 14 to 17 per
One of the negative effects of the 1929 Stock Market Crash on the country is that it led to the failure of banks. According to PBS, there was chaos in the banking system as banks tried to collect on loans made to stock market investors whose holdings were now worth little or nothing at all (PBS). What made the situation worse is that many banks had themselves invested depositors’ money into the stock market. When it was heard that the banks’ assets contained huge uncollectable loans and almost worthless stock certificates, depositors rushed to withdraw their savings (PBS). As banks were unable to raise funds from the Federal Reserve Systems, they began to fail by the hundreds in 1932 and 1933. Another negative effect is that the stock market crash was one of the causes of the Great Depression. According to the History channel, the stock market crash of 1929 was not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse of which it was also a symptom. It is then stated that by 1933, nearly half of America’s banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce (History). According to PBS, depositors had seen $140 billion disappear when their banks failed. Businesses could not get credit for inventory. Checks could not be used for payments because no one knew which checks were worthless and which were sound (PBS). Another way the stock market crash had a negative effect on the people is that according to an article published by the George Washington University, many people were upset they could not find jobs and the suicide rates increased from 14 to 17 per