The Roaring Twenties was a time period of wealth and sucess. People were buying a lot more goods. Income bacame more popular. People recieved more money which caused then which in turn caused the stocks to increase rapidly. Many of the inventors had invested all of the money that they had on hand and in the bank. Prices would continue to rise and analysts warned people that it wouldn't last forever, but they were ingnored. In October 1929, the buying spree began to stop and the selling spree began. On Thursday, October 24,1929, stock began to fall rapidly. Investors began to sell everything that he had on hand. By the end on the day the New York Stock Exchange had lost four million dollars. This Thursday was known as "Black Thursday." By 1932, stock had lost 90% of their value. The economy weakend and the unemployment rates were off the charts. Banks began to fail and the Great Depression began.
There were 5 main causes of the Great Depression. The first cause was the Stock Market Crash of 1929. Millions of dollars were lost from stocks and banks. The second cause was bank failures. Over 9,000 banks failed and as a result to that peoople started loosing their savings. Banks stopped making new loans. Third, there was a reduction on impoting goods across the boarders. People form all classes stopped purchasing items which caused a lower number of items being produced and a reduction in the workforce. As people were unable to work they were also unable to pay off things that they bought, so their items were repossesed. The unemployment rate rose 25% which ment even less to help out with this whole economic situation. The fouth cause was the American Economic Policy with Eurpoe. All businesses began to fail and the Smoot-Hawley Tariff began. That tariff raised the price on imported goods, helped protect american companies, and led to less trade with foreign countries. The last cause was the drought conditions, but it wasn't a direct cause. The Mississippi Valley was in drought and the people couldn't pay their taxes or other debts, so they had to sell their farms. That period of time was nicknamed "The Dust Bowl."
A stock is a supply of goods kept on hand for sale to comsumers by a merchant, distributor, manufacturer, ect.; inventory. A stock market is a market where stocks and bonds are traded; stock exchange. A stock market today works like this, agents bid on stocks and bonds all day long and when the day comes to and end the stock/bond has an ending price on it. Stocks and bonds are based on that price during that day for selling and buying. Every American wanted to buy a fantastic stock to get a lot of money. The Dow Jones is short for Dow Jones Industrial Average. It is an indicator of stock market prices based on the share values of 30 other stocks.
I didn't know that the Mississippi Vally was in drought and then it was called The Dust Bowl. I also didn't know that the unemployment rate went up so high and that we lost millions of dollars.
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
http://www.angelfire.com/co/pscst/stock.html
Comments
Good but expand a bit more on personal thoughts.