jouliette: history????????????????????/?
do you know about the stock market that had led the great depression to happen???
Answers and Views:
Answer by chellyk
Everyone on their brother was able to afford stocks for the first time in American History as well as borrow and buy on crredit. The stock market collapsed as people sensed the bubble was about to burst and sold their stocks in droves. This led to people making runs on banks as well to get their $ $ which led to banks failing and a further downturn inthe economy.
Chelly is incorrect. The situation was ripe for a downturn. There were precipitating factors for the Great depression and the Stock Market Crash on Black Tuesday was only a symptom of the economic problems behind the depressed economy.
The distribution of wealth was very uneven. Not everyone could afford to live a “Roaring Twenties” type of lifestyle.
Consumer debt was at an all-time high.
Overproduction was a major factor in the depression. Industry became efficient and pumped out more goods than the middle-class could afford to buy ( wages were not keeping pace!). Surplus products piled up in warehouses.
As stock prices and speculation on them kept rising, consumer debt continued to grow.
When stock prices started to drift downward, panic selling began and the downward spiral continued from there.
When businesses laid workers off and closed their doors, people couldn’t pay back their debts. Homes and farms were foreclosed on and things got worse from there.
Yes banks closed their doors, yes people lost their life savings. The worst was yet to come…schools closed for want of money, the Dust Bowl sent farmers packing the work as migrant farmers. Construction ceased, etc.
Only the large scale production needs of war were able to heal the economy.
Answer by leightonmowbrayThe Stock Market Crash of 1929 was an American economic disaster that precipitated the Great Depression, a 10-year economic slump affecting all the Western industrialized countries.
During the mid-to-late 1920s, the stock market in the United States underwent rapid expansion, reaching a peak at the end of August 1929. Prices began to decline in September and early October, but speculation continued. On October 18 the stock market began to fall precipitately. The first day of real panic, October 24, is known as “Black Thursday”; on that day a record 12,894,650 shares were traded. Though a number of major banks and investment companies bought up great blocks of stock in a successful effort to stem the panic that day, their attempts soon proved to be in vain. The panic began again on “Black Monday”; on “Black Tuesday” (October 29) 16,000,000 shares were traded, and prices on the stock market collapsed completely.
The reasons for the collapse of the stock market are complicated. Among the more obvious indications are a period of rampant speculation, the proliferation of holding companies and investment trusts (which, by nature, create debt), and a multitude of large bank loans that could not be liquidated.
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