Brooke Boll Boll 1 Ms. Huneke English 2A January 24th 2010 America’s All Time Low The United States of America has always been known as a very strong, free, wealthy country. People all over the world immigrated to the U. s for many reasons one of them being the freedom and the opportunity to choose their own living. After World War I the United States of America went through a wide economic expansion because of the new technology. The stock market benefited greatly to all this money the country was making. Many people began putting money into stocks to make a fast killing.
Most of these people never even thought that what was about to happen was even possible. The stock market will always go up is what everyone thought and never realized that it would soon come crumbling down. In September of 1929 the stock market hit an all time low which resulted in one of history’s greatest stock market disasters (Quinn). As everyone knows what goes up must come down there for in October of 1929 the market began to crash. “Even though most people did not own stocks the effects of the stock market crash were not limited to stockholders”(ABC-CLIO).
The stock market crash affected the whole entire country. This down fall was one of the major factors that caused the great depression. “After ten years of soaring values, Wall street Boll 2 commodities plunged to frighteningly low depths on Black Tuesday, October 29, 1929. The stock market collapsed in a frenzy of selling in which a record 16 million shares were dumped” (Wukovits, 19). The millions of shares in the stock market being cut created financial issues for everyone. Very rich business men lost money in their stock and started to raise prices and cut salaries.
Men and women all over the country lost their jobs and or saw their salary slashed. The unemployment percent skyrocketed and almost seven hundred banks were closed in the year of 1929, and eighty-five thousand businesses went bankrupt between 29 and 32(Wukovits, 18). The unemployment rate was nearly up to 25% in the 1930’s and did not drop back to 10% until the 1940’s. Not only did the unemployment ratio build but so did the amount of suicides throughout this time. The stock market affected everyone in the country due to the loss of money, jobs and homes.
Homeless Americans then started to ride the rails. This was dangerous and when the railroads began to hire security that often started riots on the rails. Thousands of deaths were caused by jumping on and off train cars just to have somewhere to sleep. Americans all over could not pay for everyday things because they have lost so much money. “I knew the depression had really hit when the electric lights went out. My parents could no longer pay the one dollar electric bill” (ABC-CLIO).
Prices of almost everything dropped hoping to fix the economies problems but with the salaries getting cut and jobs being lost the amount of income for most families could not even pay for basic life essentials. A winter coat was only twenty Boll 3 eight dollars, but people froze on the streets. A gas stove was nineteen ninety nine yet people all over America died of hunger due to the stock market crash and great depression. At only eight months in office the president of the United States during this crisis Herbert Hoover believed that the government should only play a small part in fixing the economy crisis.
He tried to persuade the people and work force of America that the economy was perfectly fine and to keep living life as usual. He begged businesses not to lower their prices or cut down salaries and he also asked workers not to go on strike. Hoover firmly believed that government handouts would make the people of America weak. In Hoovers eyes handouts would not allow America to come together and fix this problem. “Herbert Hoover made massive public works programs to provide jobs for unemployed workers.
He helped establish the federal farm board to assist farmers, the Federal Home Loan Bank Act to provide money for home purchases and the Reconstruction Finance Corporation to provide financing for large businesses” (Wukovits, 19). All of Hoover’s ideas and plans to make the market rise again could only do so much. So many banks tried to raise their interest rates on loans to brokers to raise money and help the economy build again but the stock market was like a roller coaster when it went up it fell back down just as hard. “Many investors lost their life savings, and many businesses and banks failed due to their losses.
One economist, Roger W. Babson, was the first to predict the crash he drew on evidence that consumers’ credit burdens were increasing, steel production was dropping, auto sales were falling, and some stocks were showing signs of price inflation. Other Boll 4 economists, like Irving Fisher, dismissed the markets downward trend as a shaking-out of speculators that would ultimately bring stability” (Galbraith). The stock market crash may have been one major cause of The Great Depression but it was also a major part in American history. The crash started the reform of laws and led to the establishment of the U.
S securities and Exchange Commissions, which enforced new requirements and other laws that were made to keep this terrible part in our history to repeat itself. Boll 5 Citations “stock market crash (over view). ” American History. ABC-CLIO, 2010. Web. 20. Jan. 2010 “stock market crash of 1929. ” American History. ABC-CLIO, 2010. Web. 20. Jan. 2010. “stock market crash” History in literature. New York: Facts on File, INC. , 2004. Bloom’s Literary reference Online. Facts on File, Inc. (accessed January 20 2010). “Stock Market Crash” The 1920’s Wukovits, John F. San Diego CA: America’s Decades, 2000. Print