Stock Market Crash Essay

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Quincy Terrell Mrs. Stevens English III 10 December 2010 American’s Greed Leads to Poverty Republican nominee Herbert Hoover shared some hopeful words with Americans in 1928. He said that the day was in sight “when poverty will be banished from this nation.” This turned out to be was wishful thinking. One percent of the richest families in America during this time received one fourth of all U.S. income (Brinkley2). Buying stocks on margin became very popular during the 1920s. People began to abuse this system to invest huge amounts of imaginary money that only existed on paper, which back fired when the prices of stocks began to fall and they did not have money to pay for the stocks purchased (Lonkevich4). In years leading up to the Stock Market Crash America’s wealth was unevenly spread among different parts of the economy. The beginnings of 1920’s were very prosperous and wealthy; excluding the farmers and unskilled workers. The crash forced thousands of banks to close. People with money in the banks lost all of their money in the accounts; devastating the economy further than it already had been. At that time, the government did not insure bank deposits as it does today. The unbalanced nature of the economy showed signs of strain (Livingston3). America made way more than they could consume during this time period, which meant they had an oversupply of goods, so they were selling goods on credit; sixty percent of cars and radios were bought on credit (Brinkley1). Customers lost their ability to buy things cause of their lack of money, so businesses reduced production, which led to the layoffs of hundreds of thousands of American workers. The growth of new business stopped completely. Family owned business was nearly completely unheard in this time period. This seemed like a continuous downward spiral. America has faced economic depressions before in the

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