Crash & Depression Chapter 32 (Cont.) 4/2011. The Stock Market Crash Section 1 1929.
Wallstreet Crash of 1929
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Transcript of Wallstreet Crash of 1929
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The Wall Street Crash of 1929
By Maia Cortés, Carlos Esteban, James Albasini and Carina Thompson
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Shares & the Stock Market
• Companies borrow money to pay for equipment or staff etc
• Investors get a share of the profit the company makes
• ‘Shareholders’ can sell their shares on the stock market.
• This is based in Wall Street, New York
• Prices can change every day according to how well the company is doing.
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The “Roaring” 20s
1. US industry had been boosted by the end of the First World War (ended in 1918)
2. Higher Purchase- people could buy on credit. There is massive consumer spending.
3. Mass Production
4. Confidence
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The “Roaring” 20s
• With more money to spend people invested on the stock market.• President Hoover’s aim: “a chicken in every pot and two cars in
every garage”.
BUT• 50% of American families earned less than $2000 a year• American Industry was producing too many goods
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The 1920´s Stock Market
• American industry booms, price of shares move up• Investors sell their shares at higher prices and make huge
profits• More people invest , pushing prices higher• The idea was to
“Get rich, quick”
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Beginning of the Crash
20 million shareholders by summer 1929
Prices reach an all time high
Experts start to worry Public doesn´t.
Profits Fall
Car and Steel Production falls
People start to Sell
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Crash
• Sat 19th Oct - 3.5 million shares sold. Prices fall.
• Mon. 21st Oct - Over 6 million shares change hands. There are still buyers on the market
• ‘Black’ Thursday - 13 million shares sold. No buyers found
• Sat 26th Oct - President Hoover “The fundamental business of the country, is on a sound and secure basis”
• Tuesday 29th Oct - 16 million shares sold. No buyers found
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Causes
Overproduction
Stocks of unsold goods
Demand falls
Profits Fall
People start to sell shares
People panic = Massive selling
CRASH
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Consequences
• 1616 banks go bankrupt • 20,000 companies go bankrupt• 12 million people out of work• No people buying – more of the above.• No money circulation – more of the
above• No support system for the unemployed.• Many homeless, some even die of
hunger.• 23,000 people committed suicide in one
year
• The Great Depression
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Consequences
1929 1930 1931 1932 19330
2
4
6
8
10
12
14
200
400
800
12.0
0
12.8
0
Number of Un-employed (mil-lion)
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Consequences
Fred Bell was a wealthy businessman before the Wall Street Crash. He became one of the many unemployed men who tried to make a living by selling apples in the street