The Wall Street Crash of 1929

By Maia Cortés, Carlos Esteban, James Albasini and Carina Thompson

Shares & the Stock Market

• Companies borrow money to pay for equipment or staff etc

• Investors get a share of the profit the company makes

• ‘Shareholders’ can sell their shares on the stock market.

• This is based in Wall Street, New York

• Prices can change every day according to how well the company is doing.

The “Roaring” 20s

1. US industry had been boosted by the end of the First World War (ended in 1918)

2. Higher Purchase- people could buy on credit. There is massive consumer spending.

3. Mass Production

4. Confidence

The “Roaring” 20s

• With more money to spend people invested on the stock market.• President Hoover’s aim: “a chicken in every pot and two cars in

every garage”.

BUT• 50% of American families earned less than $2000 a year• American Industry was producing too many goods

The 1920´s Stock Market

• American industry booms, price of shares move up• Investors sell their shares at higher prices and make huge

profits• More people invest , pushing prices higher• The idea was to

“Get rich, quick”

Beginning of the Crash

20 million shareholders by summer 1929

Prices reach an all time high

Experts start to worry Public doesn´t.

Profits Fall

Car and Steel Production falls

People start to Sell

Crash

• Sat 19th Oct - 3.5 million shares sold. Prices fall.

• Mon. 21st Oct - Over 6 million shares change hands. There are still buyers on the market

• ‘Black’ Thursday - 13 million shares sold. No buyers found

• Sat 26th Oct - President Hoover “The fundamental business of the country, is on a sound and secure basis”

• Tuesday 29th Oct - 16 million shares sold. No buyers found

Causes

Overproduction

Stocks of unsold goods

Demand falls

Profits Fall

People start to sell shares

People panic = Massive selling

CRASH

Consequences

• 1616 banks go bankrupt • 20,000 companies go bankrupt• 12 million people out of work• No people buying – more of the above.• No money circulation – more of the

above• No support system for the unemployed.• Many homeless, some even die of

hunger.• 23,000 people committed suicide in one

year

• The Great Depression

Consequences

1929 1930 1931 1932 19330

2

4

6

8

10

12

14

200

400

800

12.0

0

12.8

0

Number of Un-employed (mil-lion)

Consequences

Fred Bell was a wealthy businessman before the Wall Street Crash. He became one of the many unemployed men who tried to make a living by selling apples in the street