Today we continued doing our blog discussion about the causes of the stock market crash and the Great Depression. Mr Bruns put of an overhead sheet of causes of the stock market crash. The causes were overspeculation during the 1920's, overproduction of goods, buying on margin, unequal distribution of wealth (wealthy very wealthy and poor very poor), barrowing from banks too much, and stockprices inflated (they didn't have realy value.). The banks were giving out money like it would be around forever. People couldn't pay the banks back so banks would close and never open again. Fraud and illegal activity was a problem. Nobody was making sure that the stock market was being fair. The federal reserve policy rose interest rates but nothing else. People were buying on margin a lot, which is basically just buying stocks on credit. People would barrow money or the bank would give them loans.We also talked about the effects of the stock market crash. Banks were closing and so people who didn't get their money out lost their life savings. Businesses were closing and people were losing jobs. Some other effects were unemployment rises and people were buying even less. The economic problems spread over into Europe. The stock market crash had a huge effect on the Great Depression. People started turing to dictatorship, because they promised things and they would happen.(like Hitler)Video1. Causes- I said the causes up in the first paragraph. In the movie they talked about buying on margin. People would only have to put ten percent down and the bank would pay the rest. You could get $10,000 worth of stocks for only $1,000. People were buying on credit so they were going into debt and when the stock market crashed that didn't help any. When stock prices inflated the stocks didn't have any real value anymore. Because the stock went up for 8 straight years, people thought it would keep going up and so they would barrow more and more money thinking times would only get better.2. Story of the stock market crash- Stock market had been rising for eigth straight years. Everyone lived in unthinkably huge houses. People had multiple houses as well. Hoover, president at the time, promised to eliminate poverty from America. People were only depending on the stock markets. Thursday, October 24, was the first black thursday. People were in major panic. A group of bankers supposedly ended the crash, people thought. Really it had only stopped for that day. October 29 was when the crash really started, everyone wanted to sell and nobody wanted to buy. William Durant tried to help the market. Everytime it went down more he wold put millions more money into it. Everything people had was gone. Some people were commiting suicide because they were so depressed and thought they had nothing to live for.
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