The Stock Market Crash of 1929

The Great Depression left the American banking system in shambles and left the American people broken and scared for their futures. There were several causes that led up to the enactment of the New Deal and the Social Security Act. A major cause was "Black Tuesday." This was the largest stock market crash in U.S. history that took place on October 29, 1929. The crash happened because wealthy Americans used their revenue to speculate in real estate and the stock market rather than invest in new businesses. Another cause was U.S. banks issuing loans and credits to foreign governments in the amount of billions of dollars. Prior to the Great Depression and the enactment of the FERA, relief was based on the poor laws.

Black Tuesday, October 29, 1929 was the official beginning of The Great Depression, the day the stock market crashed. The stock market business was the way of getting rich, now was a way to go bankrupt. The government determined people invested in stocks lost $40 billion. People were so far in debt that they could not pay back the banks. 13 to 18 million people across the world had no work

h, stocks were not the only reason people had no money. Credit and banks failing had a huge part in that as well. “Banks stopped lending money. In 1930 and 1931, many banks failed, and customers lost all their

The United States entered one of the most devastating economic periods in its history after the stock market crash of 1929. The massive damage done to the quality of life of the average American during this time, known as the Great Depression, prompted a fundamental change in the attitude of the nation. The most notable change was a shift in public belief about what type of President would best serve the struggling nation. The election of Franklin D. Roosevelt completely reversed the trend of Presidents that pursued policies focused around benefitting businesses and the wealthy. Whereas leaders before him held fast in their support of big businesses, even to the point of ignoring the harm they had brought to the country, Roosevelt focused his

These periods of financial panics along with the inelastic money supply had long beleaguered the country. Bank failures, business bankruptcies, and unstable economic development were results of the lack of a central banking system (Federal Reserve System 8th ed. pp. 6-7). The Panic of 1907 was a bank run of epic proportions that exacerbated the problem. Depositors withdrew their savings from the second and third largest banks in the country. These banks were not able to generate enough funds to cover the demand and subsequently closed their doors. Their closings rapidly spread fear across the country leading to one of the largest runs on the banks the nation had ever witnessed (Schlesinger pp. 41).

As banks, churches, and businesses were closed, food became insufficient. Prices of oil barrels were dropping drastically. They went from $1.43 a barrel to a Dime! Around 1930-31 2,294 banks went bust and 28,000 businesses failed. People were not buying anything to save the little money they had for survival. At the end of 1931, the Bank of the United States in New York

Banks themselves were to blame as well. Many banks also invested money into the stock market, that the public had deposited in their banks. Once the market crashed the banks lost all of the public's lifetime savings. The panicked citizens then rushed into banks to withdraw as much money they could to save their life earnings. These waves of banking panics would later be called "Bank Runs".

After October 29, 1929 stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Within three hours the market had lost $11 billion in values. During the 1920’s the stock market and it’s investors enjoyed a streak gains, with the overall value of the stock market increases by four times the value. From September to October, the stock market had lost more than $30 billion dollars in value, remember this was in the 1920’s. The U.S stock market crashes on Black Tuesday.The Wall Street Crash of 1929, also known as Black Tuesday October 29, the Great Crash, or the Stock Market Crash of 1929, began on October 24, 1929 ("Black Thursday"), and was the most devastating stock market crash in the U.S history, when taking into consideration the full extent and duration of its aftereffects.The crash

Document two explains what happened when the banks went out of business. Black Tuesday was in October 29, 1929 and it was the day that the stock market crashed most deeply. This hinted to the start of the Great Depression. The stock market crashed because people did not have enough money to pay back the people who they borrowed money from. Due to this process the market started to fall. With prices falling, brokers asked investors to pay back what they owed. Investors then sold their stock to repay their loans. A panic quickly set in. Between October 24 and October 29, desperate people tried to unload millions of shares. As a result, stock prices dropped even further. Banks were also running out of

The Stock Market Crash played a major role in bank failures. After the crash, people were indifferent about the stability of banks, so they all began taking out their savings. Banks no longer had the currency to stay open. For those who did not take this

Many people lost as much as ten times their initial investment, which shook consumer confidence. In an effort to cover their margins, people rushed the banks in masses, demanding their money. Soon, banks began to run out of cash and went bust.

The banking industry as a whole after the stock market crashed was going bankrupt due to not being able to carry the “bad debt” that was created from using customer money to buy stock. Because the banks were out of money, they were unable to cover customer withdrawals from their bank, causing many bank customers to lose all of their savings. With the uncertainty of the future of the banking industry, many people withdrew all of their savings, which caused more than 9,000 banks to close their doors and go out of business (Kelly). Due to the effects of the Great Depression, and the collapse of the banking industry, the government created regulations to prevent similar failure in the future. For Example, the SEC, (or Securities Exchange Commission), which regulates the sell and trade of stocks, bonds and other investments was created as a result of The Great Depression. The FDIC (or Federal Deposit Insurance Corporation), was created to insure bank accounts so that that the consumer would be protected if the bank were to go out of business (Kelly). The Great Depression's effect on the banking industry led to many useful changes to the banking industry and helped restore confidence in banks in the American people.

Bank Failures (Over 9,000 banks in the US and over 100,000 around the world failed as deposits were uninsured and people lost their savings. The surviving banks unsure of the economic situation and concerned for their own survival refused to

Imagine waking up one morning, only to find out that all your investments and savings are gone. So if your bank that you invested all your money in collapsed, you didn’t get any money back. This is what happened to millions of Americans during the 1930s. This era was called the great depression.

In the late October of 1929, the United States Stock Market took an immense plummet. This plummet acted as a catalyst to the beginning of the 10 year long Great Depression. It was known as Black Tuesday, aka the Wall Street Crash of 1929. (Harold)