-In 1933 after having the worse economic depression in US history, the American people were gripped by fear for their very survival.
-depression of 1930s lasted longer and caused more business failures.
-affected both middle and working classes.
-before it was over, Hoover & Roosevelt would devote 12yrs seeking the elusive path toward recovery.
CAUSES AND EFFECTS OF THE DEPRESSION (1929-1933)
-business boom 1920s collapse in October of 1929.
Wall Street Clash:
-stock prices kept increasing for 18 mnths.
-The Dow James Industrial Average of major stocks reached an all time high of 381.
-a investor who bought stocks at the time of Hoovers election would have doubled their money in less than a year.
Black Thursday and Black Tuesday:-on Black Thursday there was an unprecedented volume of selling on Wall Street and stock prices plunged.
-from October 29 and on, prices continued to decrease & by November, Dow Jones index fell from September high of 381 to 198.
Causes of the Crash:
-the depression was a result of a combination of factors that happened during the 1920s.
Uneven distribution of income:
-economic success wasn’t shared by all.
Stock market speculation:
-ppl no longer invested their $ to share profits.
-speculating the price of a stock would go ^ & they could sell it for profit.
-Buying on margin allowed ppl to borrow most of the cost of the stock.
-when stock prices dropped, market collapsed & they lost everything they borrowed & invested.
Excessive use of credit:
-advertising stimulated consumers’ desire for the exciting new appliances and cars that were being produced.
Overproduction of consumer goods:
-Business growth produced a volume of goods that workers with stagnant wages could not continue to purchase.
Weak farm economy:
-prosperity of 1920s never reached farmers who suffered from over production, high debts & low prices since... [continues]
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