1.
The Stock Market Crash of 1929
Essential Questions:
• Why did the Stock Market Crash of 1929 occur?

2.
1920s: An Era Ends
Serious economic

problems began to
threaten prosperity
Farmers grew more corps

& raised more livestock
that they could sell at a
profit
Consumers and farmers

were going deeper into debt
It signaled the end of an era

Basic industries such as

the railroads, textiles, and
steel were barely making
a profit

3.
Agriculture
Agriculture suffered the most

During World War I prices rose

and international demand for
crops (such as wheat and corn)
soared
Farmers had planted more and

taken out loans for land and
equipment
After the war demand fell and

crop prices declined
Many lost their farms when

backs foreclosed and seized
the property as payment for the
debt

4.
Consumers and Farmers
As farmers’ incomes fell they

bought fewer goods and
services
They were buying less due to:

Rising prices

Stagnant wages

Unbalanced distribution of

income
During the 1920s the rich got

richer and the poor got poorer
Between 1920 and 1929 the

income of the wealthiest 1% of
the population rose by 75%
Compared with a 9% increase

for Americans as a whole

5.
Herbert Hoover
Hoover won in an

overwhelming victory
against Democrat Alfred
E. Smith in the election of
1929
Hoover claimed in his

campaign that America
was “nearer to the final
triumph over poverty than
ever before”
By 1929 most Americans

still had a huge trust in the
nation’s economic health

6.
The Stock Market
The Dow Jones Industrial Average was

the barometer of the stock market’s health
Measure based on the stock prices of

30 large firms trading on the NYSE
Through the 1920s stock prices rose

steadily
By 1929 about 4 million Americans, or

3% of the nation’s population, owned
stock
People began engaging in speculation

They bought stocks and bonds on the

chance of a quick profit, while ignoring
the risks
Many began buying on a margin

Paying a small percent of a stock’s

price as a down payment and
borrowing the rest

7.
The Crash
On October 24th, 1929 the market

took a plunge
Panicked investors unloaded their

shares of stocks
Black Tuesday

October 29th, known as Black

Tuesday
Shareholders dumped 16.4 million

shares of stocks
People who had bought stocks on

credit were stuck with huge debts
Others lost most of their savings

By November investors had lost

about $30 billion dollars
The Crash of the stock market

singled the beginning of the Great
Depression (1929-194)

8.
Bank and Business Failures
After the crash many people

panicked and withdrew their
money from banks
Some couldn’t get their money

because the banks had
invested in the stock market
By 1933 11,000 of the nations

25,000 banks had failed
Millions lost their savings

Nearly 90,000 businesses went

bankrupt
Unemployment skyrocketed


9.
Causes of the Great Depression
There is no one definitive

cause of the Great
Depression
Most historians and

economists cite:
Tariffs and war debt polices

that cut down the foreign
market for American goods
A crisis in the farm sector

The availability of easy

credit
An unequal distribution of

income