Black Tuesday

The Stock Market Wall St. continuously rose for 8 years, tripled from 1925 - 1929. Speculation - buy stocks low and then sell when a profit can be turned. Margin: Investors borrow money from brokers with only a small down payment. Most investments in the 20s were bought on margin, money people did NOT actually have.

The Problem with Stocks Market was NOT regulated properly Value of stocks were much higher than they should have been. Brokers knew this Everybody sold when the market started dropping

“Black Tuesday” – October 29, 1929 lost over $30 Billion nationwide on Black Tuesday. Banks lent money to brokers and investors who couldn’t afford to pay. The biggest tragedy of Black Tuesday : many people who never bought stocks lost all their savings too savings accounts weren’t insured back then.

Roaring 20’s Haunt America High Tariffs destroyed international trade Yankee imperialism made Europe dependent on America Depression becomes global Supply Side Economics created Pyramid of Wealth Pyramid of Wealth: almost all of the nation’s money is owned by very few people.

Percentage of People in America Percentage of Money Each Group Has Pyramid of Wealth Percentage of People in America Percentage of Money Each Group Has 3% Upper Class 5% Middle Class Middle class controls 8% of the Money 92% of the People only get 2% of the money Upper class controls over 90% of the Money 92% Low Class or below poverty

The Perfect Storm Farmers did NOT enjoy wealth during the 20s Most took loans to buy equipment Banks lost what little money they had Natural Disaster Massive drought hit the Midwest in 1931 Dust bowl: reference to Midwestern states where poor farmers lost land and starved because of drought. 1932 – locusts destroyed most of their crops 1933 – drought returned