Stock Market Crash & the Great Depression Mr. Koch US History B Forest Lake High School.

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Presentation transcript:

Stock Market Crash & the Great Depression Mr. Koch US History B Forest Lake High School

Warning Signs Uneven prosperity of the 1920s – Was primarily rich getting richer Often saved or invested

Warning Signs Overproduction – Production outpaced demand Caused some industries to slow Buying on credit – People buying what they couldn’t afford Payment plans

Warning Signs Playing the stock market – Optimism fueled hopes to “get- rich-quick” Over-speculation – Included many ordinary people investing more than could afford “buying on margin” – borrowing $$$ to pay for stocks

Warning Signs Problems for farmers – Decline in demand after WWI led to decreasing prices Couldn’t pay debts for land/machinery Problems for workers – Many still worked long hours for low wages in bad conditions

Stock Market Crash of 1929 With investment craze, stock prices rose to all- time high in Sept 1929 – Many prices inflated well over real value of earnings

Stock Market Crash of 1929 Black Thursday – Oct 24, 1929 – People became worried, began to sell, prices dropped

Stock Market Crash of 1929 Black Tuesday – Oct 29, 1929 – Panicked investors sold off stocks like crazy Prices collapsed – $30 billion in total losses – Many people lost everything Some lost even more – Was the “trigger” of the Great Depression (not the sole cause)

The Fallout As profits decreased, factories closed & people lost their jobs – With less $$$ to spend, more businesses were hurt and/or closed

The Fallout Banks – Nervous Americans tried to withdraw deposits in large numbers Many banks failed and closed – people lost their money

The Fallout Global economy was connected to U.S. – European economy was hurt In addition, there was no govt “safety nets” for people to fall back on