It's true...the stock market crash in October 1929 did not cause the Great Depression. There were various factors leading up to the difficulty of the 1930s. The "Crash" does, however, provide us with a moment in time where the confidence in America's economy that had been building since 1920 was dissipating.
For an excellent explanation of these events, visit this website. Be sure to watch the video that pops up (it's about 3 minutes long) and read the article.
For the comments section, in your own words detail what caused the "crash" AND discuss what actions President Roosevelt took to restore confidence in American banks.
What ultimately caused the banks to crash was a lack of confidence in American Banks. There were other factors, but that was the largest. During the Roaring Twenties, people and banks were irresponsible with their money. They borrwed money, bought things on credit, gambled on the stock market, and basically, spend money they didn't have. When the Stock Market fell harshly, people panicked. The sold stock en masse, which caused the Stock Market to crash even lower. Bank Runs, where depositors mass withdrawal all their money, became common because people were afraid that they would lose their money. Because the banks don't keep all their depositer's money at once, this made many banks go out of business because they could not pay back all the money at once.
ReplyDeletePresident Roosevelt did much to help pull America out of the Great Depression, and restore their faith in Banks. Chiefly, he established the FDIC, Federal Deposit Insurance Corporation, to insure investor's deposits, so that in case of a bank crashing, the FDIC would pay out the lost money. He also created a "Bank Holiday" where the Federal government would review individual banks, to decide whether or not they need Federal Funding to stop from going under.
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Black Thursday brought everything to a stop. banks lent out billions of dollars that they didn't have to stock spectators and etc. They assumed that everything would remain the same. When everything crashed to the ground, Millions of shares were traded and Investment companies and bankers tried to stabilize the market by buying up large amounts of stock. Everyone ran to the banks because they wanted their money back but they didn't have any money to give them because they invested the people's money into the stock market. Thousands of banks closed. Black Tuesday was when prices dropped completely and then 16,410,030 shares were traded in the New York Stock Exchange. prices continued to drop as the United States went into the Great Depression. half of America’s banks had failed, 15 million people were unemployed, which was 30 percent of the workforce. People were left with no homes, no food, and no jobs. Relief later came during the administration of Franklin D. Roosevelt (1882-1945) helped lessen the disasterous effects of the Great Depression. He tried to stabilize the economy and provide jobs for the hundreds that were unemployed by the crash.bhe and the government started a series of projects oth at were named, the New Deal that was intended to restore the dignity of the Americans affected, one of which FDIC, they assessed the banks to see which ones were worth saving. the economy in the United States did not completely return back to normal around until soon after 1939, when World War II (1939-45) had apparently changed American industry. However A lot of people blamed Herbert Hoover for the depression because part of his campaign was about how he would provide the best, he in a way put rose colored glasses on the whole situation. (277)
ReplyDeleteIn 1929 the federal reserve raised interest rates several times in a attempt to cool the overheated economy and stock market. In Thursday October 24th,1929 a spate of panic selling occurred as investors began to realize that the stock boom was actually an over-inflated speculative bubble. During November of 1929 the Dow sank from 400 to 145. In just three days over 5 billion worth of market capitalization had been erased from the stocks that were trading on the New York stock exchange. By the end of the 1929 stock market crash a staggering 16 billion worth of market capitalization had been lost from the New York stock exchanges. Bank runs soon occurred when bank patrons tried to withdraw from their savings.as stocks plunged. Even bank patrons who had not invested in shares became broke as 140 billion of despositar money disappeared and 10,000 banks closed. The 1929 stock market crash was detrimental to the society of America at that time. President Kennedys fathers Jospeh had put his saving into stocks and kept over millions of dollars. The roaring twenties and the stock market market crash of 1929 was similar to any other speculative bubble and subsequent crash.
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This was the biggest crash that we as a country have ever been in. It started in 1929 when the banks were doing well, until the banks started giving money that they didn't have to the stock people. On October 24, also known as Black Thursday, the record number of 12 million stocks were traded. What people thought and tried to do to fix it was buy a large portion of the stocks. It only got worse, leading to a Black Monday and a Black Tuesday. On that Tuesday 16 million stocks were traded. After all this went on the people wanted to go and withdraw their money from the banks. It would not be an issue if it was just a few people but it was everybody. anybody that had their money invested in a bank tried to withdraw the only problem being that these banks didn't have that money on hand. it was in the stocks. So that only made things a lot worse. The president at this time who happen to be Franklin Roosevelt, he took measures into his own hands my offering relief and reform to the public. The economy would not be the same until after world war 2 (204)
ReplyDeleteThis crash started in 1929 and was one of the biggest crashes America had ever seen at this time. In three days over billions worth of market capitalization had been erased from the stocks that were trading on the New York stock exchange. Bank runs had also been occurring during this time. 15 million people had been unemployed which didn't help families at all. They had no homes no food and now no jobs. I Roosevelt did a lot to help get America out of the Great Depression, and restore their faith in Banks. He established the FDIC.
ReplyDeleteThe economy and Wall Street was at its new high in the Roaring 20's, with business booming and the economy taking a leap in the charts. Things were looking up for the American Economy, but after August 1929, things took a turn for the worse. Unemployment rates were growing, and a declining production left stock values higher than their actual worth. The economy really took a tumble on October 18, and by October 24, 12,894,650 shares were traded, giving this day's infamous name "Black Thursday". The following Monday, the free fall began. After that, it dropped more and more, eventually resulting in a loss of billions. By October 29, 16,410,030 shares were traded in. It was so awful that the machines couldn't handle the overload of trades going on. Thousands of investors lost everything, as well as regular Americans facing the effects of the crash. Stocks had nowhere but up to go, but it was a slow and painful process during that time. By 1932, stocks were only worth 20 percent of their 1929 value. However, President Roosevelt's administration made new reforms and relief measurements to get America back on its feet again. The country made a comeback by 1939. (204)
ReplyDeleteIn the 1920s, there was a rapid growth in bank credit and loans in the US Some consumers borrowed to buy shares.you only had to pay 10 or 20% of the value of the shares; it meant you were borrowing 80-90% of the value of the shares A lot of the stock market crash can be blamed on false expectations the big key was the mismatch of production and consumption Many small farmers were driven out of business because they could not compete in the dustbowl demand for food was increasing and not much was being produced also their was Weaknesses in the banking system many banks in rural areas went bankrupt due to the agricultural recession This had a negative impact on the rest of the economy Between 1923 and 1930, 5,000 banks collapsed.
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Taylor^^^
DeleteThe stock market crash was a huge issue for the United States, we were so confident about our country after the war but it blindsided us harshly. Within the 20's the stock market in the US crashed, there was brief speculation about this but nothing really in depth or too much concern. With production declined and unemployment rising it was too late before billions of dollars were gone from the stock market. When October 18th came around, this is when panic started. Black Thursday, 12,894,650 shares were traded. The stock market crash caused half of banks to shut down and unemployment reached 30% of the workforce.
ReplyDeleteRoosevelt put hope in everyone by making a plan to implement enough liberal justices to the Court to neutralize the “obstructionist” conservatives. President Roosevelt’s protocol did more than just adjust interest rates, adjust farm allowance and made short-term make-work programs. They created a brand-new political alliance that included white working people, African Americans and left-wing intellectuals.
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DeleteBlack Tuesday was a day when millions of shares were traded on the New York Stock Exchange in one single day. Billions of dollars were completely lost and investors were wiped out. The Great Depression was what this time period was called- when there was a downturn in history. Production declined while unemployment rose. This began happening in September/October of 1939. The fall actually began on October 18. October 24, called Black Thursday, was when over 12 million stocks were traded. To try and stabilize the market, investment companies and leading bankers tried to buy up great blocks of stock. This caused a rally the next day. The following Monday, stock prices collapsed completely and eventually, the market went into free fall. Although the stock market crash wasn't the cause of the Great Depression, it did help accelerate a "global collapse" in general. By 1933, almost half of America's banks had failed. Around 15 million people were unemployed (30 percent of workers). Franklin Roosevelt tried to help people during this hard time. He tried providing people with jobs and help relieve people who were suffering and struggling. Because of Roosevelt, many banks even reopened. His policies and different programs adjusted interest rates and created short term work programs. Overall, he wanted the best for everyone and was a huge help in making that happen. (225 words)
ReplyDeleteDuring the 1920’s the U.S. stock market went through a rapid expansion it reached peak in 1929. The cause of the market collapse was low wages and debt a struggling agriculture and large bank loans. Stock prices began to decline in september and into early october in 1929. Another main cause of the collapse was the high price of the stocks. The day that became known as black thursday a record of over 12 million shares shares were sold and on a day becoming known as black tuesday a record of over 16 million shares were sold on that day in the new york stock exchange. FDR helped the economy making the Federal Deposit Insurance Corporation That ensure if there is a collapse that there will not be bank runs because you can pull out 250 thousand out of the bank if needed. He also put in other safety nets. After the collapse the stock prices had nowhere to go but up. And then they could not buy them so then it spiraled down further and this made it to where this was basically a vicious cycle that kept going on and going until someone decided to step in and that turned out to be FDR (207 words)
ReplyDeleteIn my personal opinion I thought everything was going just fine at first the stock market was starting too boom there was people buying up stocks from everywhere and storing them to earn more money until one day one stock went wrong and then every freaked out and started to sell the which led all of the banks and people that had money in banks to freak out too. So people started to sell them for half the price they got them for to get rid of them and to save themselves from losing to much money on the deal. Then once that happened one man went to the bank to withdraw all his money and the bank manager could not do this so the man spread rumors of it which started a riot and many banks went under and closed down because they did not have enough money to give to all the people which sad the stock market more and helped with the depression. It got so bad to where there were 28 states without banks which is insane amount. President Roosevelt relief and reform measures helped lessen the effects but not all the way and with all this it also caused a major effect in jobs for people (203)
ReplyDeleteEverything was actually alright at first up till 1929. The stock market was doing okay and we were all putting our investments into the stocks. When the downturn really happened was on Black Tuesday, October 29, 1929. The stock had a huge hit and the bank (who also invested heavily into the stock market) lost billions of dollars. When people all tried to pull out their investments, the bank simply didn't have all the money to help their needs. This started the masses and the bank riots in which the people panicked and all went to withdraw their share in the stock market. This caused thousands of banks to close and helped wall street collapse thus throwing us into the Great Depression. FDR helped a little bit with his government relief reforms like establishing new work forces like our local TVA and other services. He also established the FDIC and the bank holidays to help gain people's confidence in banks again thus helping that out. However with all of these programs being government run, there was not much money progress (every time you create government jobs, you have to use government money to start it). Without independent corporations and other private businesses to help propel the US, our financial state wouldn't be solved until 1939 or as we know it, World War II. (217 words)
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