1. The Stock Market Crash of 1929

2. The Stock Market
System for buying and selling shares of companies

3. In Brief… People are investing in various stocks hoping to make money
The stock market crashes (everyone pulls out their money)
They don’t make the money they thought or it is below what they originally purchased the stock for
Now they lost whatever they invested
Goodbye Money!

4. Bull Market- long period of rising stock prices
Margin- buying stocks with only small percentage down (example: with $1000 investors could buy $10,000 worth of stock)
Speculation- investors bid prices up without regards to a company’s earnings or profit

5. In the days leading up to Black Tuesday, the market was severely unstable
Periods of selling and high volumes of trading were interspersed with brief periods of rising prices and recovery
On Black Tuesday, 16 million stocks were traded and $14 billion was lost that day.

7. Run on the Banks
The banks were also investing depositor's money into the stock market.
When stock values collapsed, banks lost their investments.
Bank deposits not insured…No more money!
People ran to banks to get money, most too late.

10. The Great Depression

11. Causes for the Depression
Overproduction and low demand of goods leads to employee layoffs.

12. Low wages reduce consumer buying power.
No extra money means no extra items (refrigerator, radio, etc.)

13. High tariffs (taxes on imports/exports) restrict foreign demand for American goods.
Hawley-Smoot Tariff

14. Unemployment reduces buying power further

15. Federal Reserve kept interest rates low, making it easy to borrow money. Should have raised interest rates to curb excessive speculation.

16. Who is hit the hardest? Middle Class
Overextended in loans, not used to living frugally. Poor still poor. Rich still rich (for the most part).