The Great Depression

Approaching Disaster

• The Stock Market is where shares of companies are bought and sold.

• The stock market crashed on October 29, 1929 was called “Black Thursday”

Black Tuesday• The stock market crash on

October 29, 1929 was called “Black Thursday”

• The collapse caused people to panic and set off a chain reaction.

• Businesses in the United States came to a stand still.

• On Wall Street the prices of stocks dropped within 3 hours.

• The stocks lost 11 billion dollars of their value in minutes.

• Millions of shares of stock went up for sale – but No Buyers –

• Stock prices continued to fall, which causes people to panic.

Don’t Worry, Be Happy

• As a result of this day, the Securities Act of 1933 and the Securities Exchange Act of 1934 were formed in order to increase market regulation in hopes of preventing future catastrophic events.

• People were surprised by Black Thursday because they had just experienced the golden age of consumer based prosperity during the 1920s.

Old MacDonald had a farm…

• The prosperity of the 1920s brought into existence a middle class.

• Farmers did not benefit from the strong industrial sector.

• The more the farmers grew, the lower the prices for crops went.

From boom to bust…

• Thousands of ordinary Americans had gone into debt by using

margin to invest in the market.

• Margin is when you buy a large amount of stock with a small amount as a down payment, with the rest to be paid later.

• When the market crashed, many Americans were faced with hard times.