How Did The Stock Market Crash Of 1929
In 1929, the stock market crashed and millions lost their homes and jobs. This is important because it is apart of our American history. The Stock Market Crash of 1929 was the biggest crisis to happen in America because it lead to the begging of the Great Depression and countless numbers of homeless and jobless people.
In the twentieth century, most of the tools to produce things of value out of raw materials, in the United States, was represented by stocks. A corporation owned this stock. Ownership of this corporation caused the formation of share stock. Share stock represented an equivalent share of this corporation. Buying and selling of stocks was on stock exchanges. The most important was the New York Stock Exchange which was located on Wall Street in Manhattan.
In the 1920's, stock prices went up to peaks never seen before. From 1920 to 1929 stocks more than quadrupled in value. Many investors in stock, would borrow massively to be able to invest even more in the market. But in 1929, their luck ran out and stocks started dropping enormously in value. In 1932 and 1933, they hit rock bottom, down about 80% from their highs in the late 1920s. This terrible effects on …show more content…
Those three says are known as a "bank holiday." Some banks were then cautiously re-opened with extra strict limits on withdrawals. Eventually, confidence returned to the system and banks were then able to perform their regular economic function once again. To prevent similar crisis', the federal government set up the Federal Deposit Insurance Corporation (FDIC), which got rid of the motive for bank "runs" (to get one's money before the bank "runs out.") Backed by the FDIC, the bank could fail and go out of business, but then the government would reimburse (to make payment for expense) depositors. Another crucial system insulated commercial banks by banning banks from investing depositors' money in
In the twentieth century, most of the tools to produce things of value out of raw materials, in the United States, was represented by stocks. A corporation owned this stock. Ownership of this corporation caused the formation of share stock. Share stock represented an equivalent share of this corporation. Buying and selling of stocks was on stock exchanges. The most important was the New York Stock Exchange which was located on Wall Street in Manhattan.
In the 1920's, stock prices went up to peaks never seen before. From 1920 to 1929 stocks more than quadrupled in value. Many investors in stock, would borrow massively to be able to invest even more in the market. But in 1929, their luck ran out and stocks started dropping enormously in value. In 1932 and 1933, they hit rock bottom, down about 80% from their highs in the late 1920s. This terrible effects on …show more content…
Those three says are known as a "bank holiday." Some banks were then cautiously re-opened with extra strict limits on withdrawals. Eventually, confidence returned to the system and banks were then able to perform their regular economic function once again. To prevent similar crisis', the federal government set up the Federal Deposit Insurance Corporation (FDIC), which got rid of the motive for bank "runs" (to get one's money before the bank "runs out.") Backed by the FDIC, the bank could fail and go out of business, but then the government would reimburse (to make payment for expense) depositors. Another crucial system insulated commercial banks by banning banks from investing depositors' money in