This means that the prices for stock were too high, far higher than they were really worth, then they fell drastically. People who had borrowed money to buy high-priced stocks (intending to sell the stocks at a profit and repay lenders), went bankrupt. That’s further expounding on what I said about buying on margin. Black Tuesday also marks the beginning of the great depression (Regan3). Living conditions during this time were unsanitary and horrible.
The bull market was when prices were rising due to automobiles; steel was selling at a record high but was going down very fast. If the bull market ended when they weren’t prepared for it, then it would of left many of those investors in debt. Because other investors, which were just mostly your day-to-day average person, saw the wealthy investors selling, they decided to do the same which caused a big fall in the stocks. No matter how hard President Herbert Hoover tried to say the economy was fine, everybody continued to sell. Then finally on October 29,1929th the stock market crashed, because no one was buying and this directly led to the Great Depression.
Known also as Black Tuesday, October 29th left stockholders shattered with recorded losses reaching $40 billion dollars (Kelly, n.d.). Many banks and financial institutions began collapsing which led to irretrievable, uninsured deposits and savings. Fearing further loss, people began spending less which led to a decrease in production and an increase in unemployment. As companies began to fail, the government devised the Smoot-Hawley Tariff in order to protect American businesses. The Tariff placed high taxes on imports leading to a decline in international trade.
The average salary in china is about fifty cents a day for production, in comparison to the U.S where the average salary for someone working in production is about eleven dollars an hour. The obvious thing to do is send your production overseas, leaving thousands of Americans unemployed. This is such an ironic fact. It is very upsetting to see how people would rather save a few dollars than to save someone’s job. In my opinion it is a sick cycle, which enviably will reduce the standard of living in the United States.
In addition the interest on the debt alone was £9 million per year. All of this made it clear to Pitt that something had to happen to try to escape from the mess the government was in. In the 18th century there was a serious problem with people smuggling goods such as tea and tobacco into the country. This was to avoid the duty tax on products, which gave them a huge profit margin. This profit margin made the risk worth taking for many, resulting in the government losing money due to be not paying duty tax.
The prices of the products will either increase or stay the same but the wages of the people will always decrease. Black Thursday…as it was remembered, October 24,1929, nearly 13 million shares of stock changed hands on the New York Stock Exchange, the prices dropped sharply causing great alarm in financial community. The next day, the President reassured the people that there’s no need to alarm because the economy was on sound footing. Days, weeks, months, and years passed people lived in poverty, there are people who are called as ‘hoovervilles’ that were blaming the President of their current living status. The
670-677 3. The economic trends in the 1920's led to the great depression because people bought lots of things on credit that they couldn't afford there for they could pay back the loans and so the businesses took back the merchandise but could not resell them because it was used, therefor the businesses lost money and slowed production and cut back workers. So now there were less people employed and many businesses went out of businesses and then lots of people lost tuns of money in the stock market crash. 4. I think that the economy needs some confidence because when there is to little confidence there is not enough money in banks, or invested .
In addition to that, the stock market crashed because of a weak-banking system and because of the fact that the Government allowed businesses to make decisions even if it hurt everyone else. If people did not take advantage of loans, then the Great Depression would have never happened
Not when prices would have to fall over 90 percent if they’ve been set in terms of Bitcoin. Falling prices sound like a good thing, but they’re not. If prices were to fall then people would procrastinate on buying things, when this happens and companies notice then companies stop investing. If companies where to stop investing, if that were to happen then the economy would get worse and people would get in debts that they can’t afford to pay because of the economy. If that was ever to happen then banks would not profit, which would lead to banks being afraid to make loans which would just make the economy get worse and prices would plummet.
Franklin D. Roosevelt and the Success of His New Deal The American economy started weakening by the middle of the1920s. However, over investment and speculating in stocks inflated their prices that contributed to the delusion of a robust economy. Since stocks were the hottest commodity to invest in, people borrowed money and used their stocks as collateral to the banks.The Great Depression was considered started on Black Thursday October 24th, 1929 when the New York Stock Exchange collapsed in the greatest market crash with the Dow closed at 316.38, and the plunge continued until the Dow reached its low of 41.22 in 1932. When the stocks values dropped, people were not able to pay for their debts while the banks just held worthless collaterals. Many banks declared bankruptcies because they could not get back their money from stock investors.