preview

How Did The Stock Market Crash That Led Up To The Great Depression

Decent Essays
People began buying things such as cars and appliances on credit. Many people earned less money than needed to live a comfortable lifestyle. Businesses were letting people with lower incomes buy things on credit. Unfortunately the stocks rose faster than the value of the companies they represented. When the stock market collapsed, these people did not have the money to pay back what they owed. This resulted in financial ruin. Before the stock market crash investors traded about sixteen million shares on the New York stock exchange each day. After "Black Tuesday", billions of dollars were lost wiping out thousands of investors. Had most of those investors sold their stock the day before the crash, they would have received a large profit. The 1929 crash uncovered another problem in the United States. The nations banking system was in trouble. In the 1920's thousands of new banks were opened, however, most lacked adequate money in reserves. Between 1923 and 1929, banks across the country failed daily, but the general rising prosperity hid these failures. The crash made a bad situation even worse, and banks failed at a more rapid rate.
Most American lived in cities and small towns up until the 1920s. Agriculture was in decent shape and production had been rising. Despite
…show more content…
The Dust Bowl lasted longer than eight years. From 1931-1939 the worst drought in United States history attacked Southern and Midwestern Great Plains states. Crops withered away, the loosened topsoil was blown away, and gigantic storms of dust swept Oklahoma and Texas all the way to North Dakota.There were brownish hazes of dirt multiple stories high. The dust storms affected 27 states and covered over 75 percent of the entire nation. Most farm families left their lands and headed for California. There were so many migrant workers that officials of California posted guards at state borders to keep certain people
Get Access