The stock market crash of 1929 during the terrible many people were left homeless because they did not have jobs, without the people having jobs they did not have enough people to pay for their house or food for their children, this made mothers very upset when they couldn’t afford food for their kids. According to the website investopedia, “the stock market crash was a severe downturn in equity prices that occurred in October of 1929 in the United States, and which marked the end of the Roaring Twenties” (“Stock Market Crash of 1929”#6). The crash of 1929 did not occur in one day, but was spread out over a two week period beginning in middle October.
As reported by the history book, “the first portion of the crash occurred on October 24, a day known as Black Thursday”(“Emma J. Lapsansky-Werner”#258). Pre existing selling pressures and fear in the stock market were exasperated by a flood of sell orders that shut down the ticker-tape service that provided stock prices to traders. With key information missing from the markets, selling intensified even further.
As stated in to the Encyclopedia, “a few attempts at recovery, the stock market crash continued to languish, eventually almost falling almost 90% from its peak in 1929, after a period of of wide speculation”(“1929 Stock Market Crash”#20). Conforming to the history textbook, production had already declined and unemployment had risen, leaving stocks in great excess of their real value(“Emma J. Lapsansky-Werner”#258). Among the other causes of eventual market collapse were low wages, the proliferation of debt, a struggling agricultural sector and an excess of large bank loans that could not be liquidated.
In manner of the history book, “after October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks”(“Emma J. Lapsansky-Werner”#258). Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were only worth about 20 percent of their value. According to the website Investopedia, “the Stock Market crash was not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse of which it was was also a symptom”(“Stock Market Crash of 1929”#3). By 1993, nearly half of America’s banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce.
As report to the website Investopedia, “stock prices began to decline in September and in early October 1929, and on October 18 the fall began”(“Stock Market Crash of 1929”#1). According to the website Encyclopedia, “panic set in, and on October 24, Black Thursday, a record 12,894,650 shares were traded”(“1929 Stock Market Crash”#6). Investment companies and bankers attempted to stabilize the market by buying up great blocks of stocks, producing a moderate rally on Friday. On Monday, however, the storm broke anew, and market went into free fall. Corresponding to the website Encyclopedia, “Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading”(“1929 Stock Market Crash”#20).
Relief and reform measures enacted by the administration of president Franklin D. Roosevelt helped lessen the worst effects of the Great Depression; however, the U.S. economy would not fully turn until after 1933, when World War II revitalized American industry. The days surrounding the stock market crash was especially painful for investors who had borrowed money to purchase stocks that had become worthless or close to it. The situation influenced what became a major turning point for the American economy because many of these borrowers, who had leveraged themselves considerably in an effort to participate in the bull market, were ruined financially. They had to sell everything to pay back their debts, and many could pay them back at all.
Besides the dramatic effect on people, the stock market crash contributed to the creation of a variety of new jobs, organizations and programs designed to improve the country’s stability, and economy and sustain further social welfare.