During the 1920's ,also known as the "Roaring Twenties", people of the United States were experiencing peace and prosperity. The economy during this time was doing well due to the advanced technology of the radio, air flight and cars.As the technology kept advancing so did the Dow Jones Industrial Average. As this happened countless investors began to pick up shares. Many Investors saw buying shares as a safe thing to do because of the growing economy.The Dow Jones continued to grow as it grew from 60 to an unheard of 400 from 1921 to 1929. Anyone who had shares in companies were soon were very glad and were making quite a bit of money off the shares. As the stock market went up more people kept buying shares. Investors soon began to mortgage their homes and their whole savings. The most popular shares were those of big companies such as Ford and RCA. I think this was not a very bright desision of them because they didnt even know anything as to what shares were all about or that they have a chance to loose value over time.The Stock Market was said to have crashed on "Black Thursday" and "Black Tuesday". In 1929 on September 3 the Dow Jones reached an all time high 381. On Thursday, October 24, the dow was at 299 witch would be a 21% decrease from the all time high. That day the Dow dropped 9%. By November 13. 1929 the dow had dropped to 199 and by 1932, when the crash was over, the stocks had lost almost 90% of their value.One cause of the Great Depression is deffinitly the stock market crash. After the stock market crash people who had shares, witch most did, lost a lot of money. With the money that they did have in the banks they also lost when the banks failed.Another reason for the Depression is because of the Smoot- Hawley Tarrif in 1930.This tarrif charged high taxes on imports witch inturn decreases trading with forgien countries. Dust storms also played a major role in the great depression.
Comments