What is the stock market? Where people buy and sell ownership of companies (shares)

Black Tuesday Tuesday, October 29, 1929 “Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.” –Richard Salsman

The 1920s had a “get rich quick” attitude Not only were people buying new things, but they were investing a lot of money in the stock market The amount of money invested was not sustainable

Chronology of Events 1919- Treaty of Versailles ends WWI; US lends money to Germany and Britain Early 1920s- farm production is too high, and a large surplus drops prices Mid-1920s- industrial production increased by 25%; citizens bought and traded an unsustainable amount of stocks; system overloaded Oct. 29, 1929- Black Tuesday; market crashes

1931- European countries began to suffer from the market crash 1932- prices drop to 20% of their previous value; output fell by 54%; unemployment at 25-30%; international markets close 1933- almost half of US banks closed; Hitler rises to power in Germany 1936- depression ends in Germany due to Hitler’s public works programs 1939- 15% unemployment 1941- WWII begins; depression is over

What trend do you see in this diagram?

Results Many people invested all their money, and had nothing else saved Banks fail People can no longer afford their homes Some are forced to sell everything they have just to buy food The “Great Depression” begins