H.W. # 60: “The ‘29 Crash” Read pages 717-722 (to FDR…)Questions: 1. Why did the stock market crash in 1929??
2. How did the crash affect the U.S. economy?
The Stock market crash of 1929 catalyzed one of American’s steepest economic declines, in what became known as the Great Depression. The Roaring 20s had often consisted of reckless consumerism and high-risk stock trading, to which any financial value was only on paper. When the bull market peaked in September 1929 and Dow Jones lost 21 points in one hour on October 23, many investors panicked and more than 16 million shares were traded on Black Tuesday (October 29). Production at the time had also reached a climax point; enhanced to the extent that most of the U.S. wealth was clustered at the top of a spiral with a long way down. In an ironic attempt to prevent financial loss, citizens began to save and withdraw their saving from banks nationwide, when in reality mass consumerism could have stopped the spiral and prevent several bank foreclosures.
2. In the aftermath of the Crash, unemployment was heavily increasing, especially in populated urban centers reaching 50%. Nationwide financial fragility was heavily apparent, bringing levels of guilt, stress, and suicidal emotion. Herbert Hoover, another President in the wrong place and time, did not help to savage the population’s economic crisis, by refusing to intervene in government aid, crediting that “It would be doing them a disservice.” Protest turned violent in a period of mass anger and irritation at lack of direct government action; Communist lead protests at Ford Factory and Detroit police using tear gas and bullets. Shantytowns made of little more than cardboard and bare supplies were “affectingly” nicknamed Hoovervilles in honor of the person who had created them. The Dust Bowl ruined cropping and forced several farmers to migrate to California. Major beneficial change had only commenced with the inauguration of President FDR and New Deal, which included opening banks and providing financial and social aid.