Today we kept our blog discussions going.
Stock Market in 1920s:
A stock is money you give to a company to expand and grow, you then own a share of the company. In the 1920s it was very prospherous people wanted to buy more expensive items and the price for them kept raising. People kept buying stocks and the prices kept raising. In 1929 the great depression started when it crashed. Margining buying was when someone would borrow money to buy stock and then would use the stock money as collateral to pay off the loan. Banks then started investing peoples money in the stock market to make themselves more money without the peoples permission. Only about 3% of the people used the stock market. A stock speculator plays the stock just to make money and it drives the prices of the stock up. By the late 1920s companies weren't making a lot of money, and they quit buying things.
People stopped buying goods--> companies not making money--> people lost jobs-->people stop buying goods--> repeat/ kept getting worse
Stock Market Crash:
In early Sept. 1929 stocks kept rising, and then they fell. Panicked investors uploaded their shares. When stocks were falling, Wall Street bought a lot of stock on Oct 24th, and the prices started to go back up. It didn't last. On Oct. 29 (black Tuesday) people panicked even more, and bought more stocks and tried to sell more of them to avoid dept, but nobody wanted to buy them- stock prices fell drastically. Since a lot of people bought in Margin- banks would try to get their money back that they lent for the Margins- thousands of banks closed down. Lost 30 billion dollars in the stock market.
1928 Election:
Herbert Hoober (R) vs. Al Smith (D)
Herbert completey dominated Smith. Mainly because Smith tried to convert everybody to be Cathlic.
We didn't like this, because we were kinda founded on being anti-cathloic from Britian and we broke away from them. There has only been one catholic president. People are concerned with Catholic presidents because they think the pope would run our country.
Campain issues: In 1928 the economy was still booming, and people wanted to stay with the Republicans because we're doing good. Hoober campained over radio, but wasn't too good as speaking.
J.P Morgan was one of the big guys, really rich, during that period of time. There is now a bank named after him.
John D. Rockefeller didn't believe in the stock market, although he was rich. Saw something bad could happen.
Banks and Business Collapse:
Many banks and business collapsed prior to stock market collapse. Why? They invested people's money in stock market with out their permission. Also, lent a lot of money out to stock brokers, nobody could pay them back. People ran to banks and took their money out, then banks had to close when ran out of money.
Businesses failed, 90,000 business went bankrupt.
Affects Stock Market Crash had on other Countries:
Our stocks markets were interdependant, so when ours crash everybody els'd did but four (france...). Up til this time, gold was being used to back up money. For the most part after the crash, we got off of our gold. A lot of banks crashed when ours did. No other Countries were booming in the 1920s because of WW1 affected them more than us. They were struggling already, and the stock market crash hit them hard. Because they were doing so bad, countries were relying on others, so our crash affected them more.
Hawley Smoot Tariff- Highest Tariff we have had. Tried to be good for american business. Other countries couldn't afford to trade with us, so it was another defect to us. When we put high tariffs on our goods, they put high tariffs on their goods, and we can't afford their goods, stopped some world trade- which we needed.
Depression in the Cities:
It hit the ports the hardest. In this time America started to lean more towards the steel and automobile industries. Companies and businesses dropped out and unemplyment became a big factor. Farmers moved to the cities due to poor crops, and many people lost money to pay for their homes and were on the streets.
People moved to Hoovervilles or Shantytowns. They made houses of cardboard and shaks on the outskirts of town.
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