1. Stock Market Crash 1929

2. Political Cartoon Who is the man in the image?
Why does he look sullen?
What is the advice the squirrel is trying to give?
What do you think this says about the times?

3. Pre 1929
-Between 1924 and 1929 the Dow Jones Industrial Average quadrupled
-People buying home goods on installment plans became common
-People began buying stock on margin in the 1920’s.
What do you think of buying on margin after the stock market activity?
-Are we in a bull or bear market right now and why?

4. Stock Market Chart

5. Black Tuesday -Tuesday October 29, 1929
-The market fell over 12 percent in October 28th 1929.
-Fear set in and people sold off their stocks in a panic
-Over 16 million trades occurred on October 29, 1929

6. What were the causes?
-Speculation: people could buy stock on margin where they would only have to put down 10 dollars to buy a 30 dollar stock
-People mortgaged their homes and businesses to buy stock with the idea they would go up indefinitely.
-Banks came calling for their money when the market crashed and many people had to liquidate their businesses and life savings

7. Causes Cont. -Over production
-Companies produced goods for the market thinking that prices and spending would continue to go up. Problematic?
-As a result of the stock market companies slowed production and were forced to layoff workers

8. Causes
Banks
-People tried to withdraw money from their accounts and the money was gone
-People would line up around the block to try and get money. The banks would pass out money until they ran out
-Over 20 percent of banks in America would fail by 1933

9. Effects -Unemployment skyrocketed to over 25 percent in 1933
-Average wages fell by over 42 percent
-Thousands of farms across the country failed
-Many people could not afford to feed their families
-Catalysts for the Great Depression