1929 Wall Street Crash Discussion Questions

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1929 Wall Street Crash Discussion Questions Commentary___ 1. Why did some observers of the stock market boom, including Alan Temple, Roger Babson, and cartoonist "Ding" Darling, warn of a coming crash? Many observers, including Alan Temple, Roger Babson, and cartoonist "Ding" Darling, foresaw a stock market crash after the boom because they disagreed with many of the strategies employed by stockbrokers and the wealthy. They expressed a variety of concerns, including the public's lack of understanding of how the stock market works, despite repeated assurances that it may be used to gain large sums of money. Temple illustrated why selling something for a higher price than it was purchased was not a good idea. The nation's avarice and obsession with gaining money and being affluent were, and continue to be, disturbing. 2. Why did others, including John Raskob, Irving Fisher, Charles Dice, and the Wall Street Journal , dismiss such warnings? John Raskob, Irving Fisher, Charles Dice, and the Wall Street Journal , dismissed such warnings because they were too confident in the economy as stocks kept rising. 3. Describe the variety of editorial responses in the nation's newspapers on October 30, 1929, the day after "Black Tuesday." Who and what was to blame? What was the nation to do? There was a lot of finger-pointing after the stock market crash of 1929. Many people blamed the Federal Reserve for not doing more to prevent the crash. Others blamed the stockbrokers and bankers for engaging in too much speculation. Some people blamed the government for not regulating the stock market more closely. And some people blamed the individual investors for borrowing too much money to buy stock.The stock market crash of 1929 was a turning point in American history. After years of soaring stock prices and economic prosperity, the crash ushered in a period of economic decline and hardship that would last for more than a decade. 4. Why was the 1929 crash described as a "new kind of panic"? How did it differ from the panics of 1907, 1901, 1896, and earlier years? (See Supplemental Sites below.) There are a few reasons why the 1992 crash was described as a new kind of panic. First, it was one of the first times that computers were used extensively to trade stocks. This led to a lot of confusion and panic when the prices started to drop. Second, the crash happened very quickly, in just a few hours. This was much different than previous stock market crashes, which tended to happen over a period

of days or weeks. Finally, the crash affected a lot of different types of investors, from small individual investors to large institutional investors. 5. Study the variety of phrases coined to describe the unique nature and severity of the crash, such as "the prosperity panic of 1929" and "a stock market hurricane." What do they illustrate about the nation's response to the crash? "The Prosperity Panic of 1929" and "A Stock Market Hurricane" depict their respective reactions to the stock market catastrophe. The first portrays the panic of banking, business, and agricultural disasters during "The Prosperity Panic of 1929." Many people were afraid of the catastrophe, to the extent that several restaurants urged guests not to talk about Wall Street. The Wall Street Journal's article "Market Smash Epoch Making" describes the collapse as a "Stock Market Hurricane" since many firms were affected. 6. Why did some financial analysts believe the crash would not fundamentally disturb national prosperity? "With market uncertainties virtually at an end and with credit being released from Wall Street for ordinary business uses, the way is prepared for a further advance in industry." People were going to take advantage of the dip, but they didn't have the full picture and couldn't predict the public's reaction. Also, they didn't think it was more isolated to only the stock market. 7. What role did President Hoover assume during the financial crisis? What was expected of him as chief executive? The role the president assumed during the crisis was to find ways of recovering the nation's economy. These ways of stabilizing the economy mostly failed.The role the president was expected to perform during the financial crisis was to provide job opportunities to the unemployed and stabilize the economy of the nation which he did not achieve as high levels of unemployment resulted in poverty. 8. Why was the Federal Reserve System blamed by some and praised by others for its role in the stock market boom and crash? The Federal Reserve System was faulted by a few and adulated by others for its part in the financial exchange and crash for some reasons. They were accused by others in light of the fact that the general population had nobody to fault when the market slumped. They saw that the Federal Reserve System controlled banks, so it should be them. 9. How did analysts judge the banking system? the "small speculator"? What other factors were singled out as contributors to the crash?

Analysts judged the banking system negatively because guidelines were abandoned by bankers who loaned too much money, likening them to "small speculators" who were no better than weekend gamblers. Additionally, overconfidence in the economy was singled out as another factor contributing to the crash. 10. According to two commentators, how did the stock market boom fit the "American temperament"—its historic "pioneer spirit"? The stock market boom is seen as fitting the "American temperament" or historic "pioneer spirit" because it reflects the American drive to pursue opportunities for improvement and advancement. This spirit includes a willingness to take risks in the hopes of achieving profitable outcomes, similar to the risk-taking and pioneering attitude of early American settlers and entrepreneurs. 11. In what way was the commentary by journalist Frederick Lewis Allen, written two years after the crash, an elegy for the lost optimism of the 1920s? The commentary by journalist Frederick Lewis Allen, written two years after the crash, served as an elegy for the lost optimism of the 1920s by highlighting how the confidence in the stock market had significantly decreased. Rather than just focusing on the excitement of watching stocks rise, people became more conscious of the possibility of experiencing losses in the market. This shift in perspective reflected a broader change in sentiment from optimism to caution following the crash. 12. What did lawyer Barnie Winkelman mean by the "magic of red ink" in his study Ten Years on Wall Street , published three years after the crash? What changes in national attitude were apparent by 1932? Lawyer Barnie Winkelman meant that the "magic of red ink" referred to the positive aspect of stocks dropping in value. In his study, he highlighted that after the crash, the drops in stock prices were viewed differently. Instead of solely being seen as negative losses, they were now perceived as an opportunity for investment or buying stocks at a lower price. This shift in attitude indicated a change in the national perspective towards stock market fluctuations by 1932. Political Cartoons___ 13. Did the cartoonists applaud or lament the unprecedented stock market speculation that preceded the crash? The cartoonists applauded the unprecedented stock market speculation that preceded the crash by making jokes about it. They found humor in the situation and used their cartoons to celebrate or mock the speculative behavior in the stock market at that time.

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