Effects Of The Stock Market Crash

Great Essays
Stock Market Crash of 1929: From Upswing to Rock Bottom.
"We have hit rock bottom and are on the upswing," said Secretary of State, James Davis, after the crash. The Stock Market Crash of 1929 caused the United States to face many difficulties. Millions of Americans and even people across the globe were hit and somewhat effected by this tragic period in history. Many economists and historians believe the Great Depression was an effect of the crash, but the crash only signaled what was already the start of the Depression. The effects were seen in finances and unemployment, and because the stock market crashed, the economy of America plummeted. Many lost life savings, bankers and brokers had no money to loan so were forced to close, unemployment
…show more content…
Since banks had invested people 's money on stocks and lost the money, the people did not trust the banking system and did not want to put their money into them. Financial institutions failed because people took out loans, lost it by speculating on stocks, and couldn 't pay it back. The bank had borrowed that money from its depositors and could not pay them the money that they deposited back, so the system failed. People didn 't trust the banking system to keep the little money they had left safe and chose to keeps it secure at home. Credit unions had no money to loan or invest and were forced to declare bankruptcy. The Federal Reserve Board played a big role in bank failures, because they cut interest rates to stimulate economic growth. Many people feared that their money was being misused (it was) so they went and withdrew all their money. The banking system was not ready for such heavy losses, had no insurance and had to close their doors to the public. By 1933, nearly half of the country 's banks had …show more content…
"At the peak of the Great Depression, there were more than 13 million people unemployed." (The Stock Market Crash and Beyond). Consumer 's low confidence stopped them from buying from factories which led to a massive lay-off. More and more of the American people relied on government and charities to feed their families. The government decided to take action and implemented some remedies to help the needy. The Federal Emergency Relief Administration allocated direct relief to thousands of people and families in the form of direct payments. Public Works Administration made jobs for skilled construction and factory workers on a wide range of projects. Civilian Conservation Corps provided men between the ages of 18 to 25 a job in camps managed by the army

Related Documents

  • Improved Essays

    There were many causes and effects of the Stock Market Crash of 1929, but the aftermath known as Black Tuesday stunned the Wall Street investors which led to the Great Depression in the 1930s. The Stock Market was the top dog of the income factor for the United States in the 1920s. It started falling in the late spring and early summer of 1929. Banks started loaning out too much money and were not getting their money back from the loans…

    • 1206 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    The Great Depression was triggered by the stock market crash of 1929. Banks, factories and stores started to fail and eventually they closed, there was a drastic reduction in purchasing goods. The unequal distribution of wealth contributed to the great depression, In the 1920s, the wealthiest one percent owned more than a third of American assets. The economic impact the Great Depression had on the United States was very profound. The amount of jobs lost reached…

    • 1748 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    According to the article “The Great Depression Brings Economic Crisis” from the book Great Events, The Stock Market Crash of 1929 caused one of the largest economic depressions in the history of the United States causing many American families to lose nearly all of their money. When this occurred, the United States government did very little to help the citizens of the United States leaving families and the working class to fight for their survival. The Stock Market Crash of 1929 changed the lives of the United States working class as the crash caused money loss, job loss, poor living conditions, lower wages, and struggles for food across America for the working class during the 1930s. The Stock Market Crash of 1929 caused several losses for…

    • 1472 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    Similarity In Generations

    • 714 Words
    • 3 Pages

    This crash began the worst depression ever in U.S. history. President Herbert Hoover, the man blamed by many for this crash, named this tragedy the Great Depression. The Great Depression was the largest economic collapse in American’s history in the 21rst Century. It started in 1929 and it ended by 1940. The stock market crash occurred because people took out loans while they were in a position where it would be nearly impossible for them to pay the loans back.…

    • 714 Words
    • 3 Pages
    Improved Essays
  • Superior Essays

    As stock prices drastically went down on Black Tuesday many people watched as they fell into debt. Any hope that the roaring 20’s had put into the minds of citizens was quickly shattered as stocks hit rock bottom prices and were sold off rapidly to avoid any further loss (Canada History, 2013). When the stock prices fell many Canadians had bought substantial amounts of stocks on loan hoping to make profit off them when they go up because…

    • 1188 Words
    • 5 Pages
    Superior Essays
  • Superior Essays

    They lost everything they owned and the rural banks collapsed due to no payments from the farmers. In urban areas, workers did not make enough money and could not afford to pay for consumer goods. The multiplier effect soon took place and many employees were laid off and companies went out of order due to not receiving income. All of these factors together put America 's economy in a fragile state that it couldn 't handle for long. Eventually the economical structure couldn 't handle the load anymore and collapsed, resulting in the decade long Great depression which changed every Americans…

    • 1662 Words
    • 7 Pages
    Superior Essays
  • Improved Essays

    The stock market crash sent Wall Street into a panic and also wiped out millions of investors. This day was called “Black Thursday” in the history of the United States. The New York stock market crashed because individuals that had the stock wanted to sell them, and no one was willing to buy. During the roaring twenties, people had spent more on investment, and could no longer pay off their debts and loans, which resulted in the urge to sell their stocks. The following several years experienced a drop in investment…

    • 1748 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    This time period has made a huge impact on American society because it caused people to lose all trust in the banks, it caused a major job shortage, and it negatively impacted the American spirit. The Depression quickly caused the American people to lose all faith in the banks. When the stock market finally crashed on October 29, 1929, the banks lost billions of dollars (Lindop 9). Banks had invested their depositors’ money; therefore, when the stocks bottomed out all of the depositors’ money vanished. All across America, people “no longer trusted banks to keep their money safe.…

    • 1080 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Throughout the years that came “Consumer spending and investment dropped, causing steep declines in industrial output and rising levels of unemployment as failing companies laid off workers”. As years went on there was a mass incensement of unemployment and is documented to be on of the worst times of American employment. And although we are well aware of the crash of the stock market to be one of the main causes there were also many other reasons to the contribution of the depression such as lack of diversification in the American economy, maldistribution of purchasing power, and the credit structure of the economy. And it was throughout all this and the years to come that would eventually lead the U.S out of the depression and into a great progressive nation.…

    • 1074 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    In addition, over nine thousand banks failed and personnel income, tax revenues, profits and prices dropped dramatically. Nevertheless, the Great Depression could have been avoided by the stock market speculation and mass selling, income stratification, the people were spending beyond their means and most importantly, the policy decisions…

    • 791 Words
    • 4 Pages
    Improved Essays