1. Black Tuesday

2. The Stock Market
Wall St. continuously rose for 8 years, tripled from
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.

3. 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

4. “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.

5. 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.

6. 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

7. 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