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What was the date of Black Tuesday?
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Cause:
◦ The stock market crash of 1929.
Stock= Allows a person to invest in a business (become
part owner).
Stock is divided into
purchased.
shares which can be
◦ Buy at a certain price- if business improves price/value
of shares goes up!
= PROFIT!!!
What was happening before the Crash?
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1920’s- a.k.a. Roaring ’20s
Faith in the economy was high, everyone had
money.
 Why?

WWI- America supplies Allies with war

Mass production of automobile and other in
home products.

Result: Value of stock is up,
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goods= many jobs, lots of $$.
many invest to “get rich quick.”
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Hidden Problems:
◦ Unfair distribution of wealth
◦ Consumer buying slows down
(credit limits are maxed out)
1929:
Demand/Buying is down= value of stocks
stops increasing.
Worried shareholders begin to sell
= prices fall.
Panic sets in- everyone begins selling.

Black Tuesday:

October 29, 1929= stock market crashes!!
Over 6 million stocks sold

Why such a big problem?
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EVERYONE owned stock!!
Many bought stock on credit or through
bank loans.
When values plummet= people cannot pay
debts. Businesses & banks suffer.
Many lose their life savings
Depression sets in!!
•
Industry Slows
As industry slowed, workers lost jobs
•
One out of four unemployed by 1933
•
Joblessness, poverty reduced ability to buy
food, goods, hurt industry even further
•
Banks suffered when businesses, investors
failed to pay off loans; many failed

•
•
•
President Herbert Hoover favored minimal
government response to crisis
Some thought depression was normal
adjustment to overheated economy
Hoover eventually took some actions, many
felt too little too late
•
•
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FDR elected president, 1932
Increased federal government’s role in lives
of Americans
Pushed forward New Deal, program to fight
Great Depression
•
•
•
Provided government spending to help start
economic recovery
Public works programs to provide jobs,
government money for welfare, relief
New regulations to reform, protect stock
market, banking system

John Maynard Keynes – British economist
Believed gov’ts could limit/prevent economic
downturns
Gov’t should spend money

◦ Spending would help increase economic output
◦ Factories would hire workers to meet new
demand
◦ Eventually workers would begin spending, ---◦ depression would end