The Stock Market Crash “And we all fall down...”

Stock Market Crash 1920s - Canadians were optimistic about the stock market To gain greater returns, investors began buying on margin Sept. 1929 - Some investors sell shares for cash

Late October: number of stocks for sale outnumbers demand October 29, 1929: BLACK TUESDAY New York Stock Exchange collapses Toronto Stock Exchange fails as well Great Depression begins

Cause or Effect Was the stock market crash of 1929 the cause of the Great Depression or was it an effect? What’s the difference between cause and effect?

Causes of the Great Depression The Single Men's Unemployed Association parading to Bathurst Street United Church, Toronto Text Causes of the Great Depression

Overproduction and Over-expansion Industries produced too many goods that people couldn’t afford Companies expanded their manufacturing capacity, producing even more goods than people could buy Huge inventories piled up

Factory owners started to lay off workers Unemployed people have no money to buy goods

Canada’s Dependence on a Few Primary Products Canada depended too much on the production of wheat, fish, pulp and paper Less diversity meant fewer products and a smaller market

Canada’s Dependence on the U.S. Imported 65% of products from the U.S. Exported 40% of products to U.S. When the economy collapsed in the U.S., it had to collapse in Canada

High Tariffs Choked off International Trade Protective tariffs in the U.S. and Europe prevented nations from trading goods with one another Less goods traded = bigger inventory and more unemployed factory workers

Too Much Credit Buying Canadians encouraged to “Buy Now, Pay Later” to purchase goods Led to much personal debt

Too Much Margin Buying of Stocks Many people bought stocks from various companies because profits were always increasing Stock Market crash wiped out 50% of all stock value in a few hours Big and small investors wiped out!