An Overview Of The Roaring Twenties (05:41)
The 1920s was a time of great change and excitement in America. The economy was booming, and many people could buy cars and other new gadgets. There was also a lot of excitement about the stock market, and many people invested in it.
Stock Market: Seeking Prosperity (04:38)
Americans became fascinated with stock exchange dabbling, which caused stock prices to multiply by four in five years. This created an illusion of easy money and caused people to become addicted to the stock market. John Jakob Raskob encouraged people to keep investing, and the economy seemed safe and guaranteed. This led to the Great Crash of 1929.
Wall Street Capitalism (02:41)
In the 1920s, many people invested in the stock market, especially because it was easy to borrow money to do so. The stock market was doing well until it crashed in 1929.
The Market Goes Crazy (04:18)
The market was going crazy because people were being encouraged in their confidence by the nation's financial leaders, who were saying that everything was fine. A small group of people with inside information bought stocks in a company, artificially inflated the prices, and then quickly sold their stocks so they could make a profit. Ordinary people who had been encouraged to buy the same stock were left with the losing.
Market Crash Signs (01:52)
There were signs before the market crash that the economy was starting to go down again. The high level of stock prices, investment trusts, and margin borrowing were all signs that there was trouble to come. The bubble burst in October of 1929.
Stock Market Collapses (03:53)
The stock market crashed in 1929 because people panicked after realizing that their assumption that prices would only go up was wrong. The market was overvalued and could not handle all the trades that were being made, which caused it to fall rapidly.
Exaggerated Legends (02:30)
The wildest rumors were going around. 11 speculators were said to have committed suicide. It is alleged that the manager of the Ritz required customers to pay for their room in advance, asking them if they wanted a room to spend the night or to jump. There were indeed some suicides, but not as many as reported.
Official Reaction to Market Crash (05:33)
The reaction to the stock market crash of 1929 was one of shock, disbelief, and hubris. Officials tried to assure people that everything was all right, but the market did not recover. It signaled the beginning of the Great Depression, which was characterized by high unemployment, low production, and deflation.
Financial Crisis Of 1929 (03:14)
The banking system collapsed in 1929, leading to a financial crisis and a downward spiral in the economy.
Middle Class Hit Hardest by Depression (03:48)
The middle class were hardest hit by the Great Depression. President Hoover was terrible at his job because he did not have an understanding of the underlying causes and by trying quick fixes, he made the depression worse.
The Downward Spiral Impacts World (03:55)
The Depression was not just a purely American phenomenon. It spread to Europe, where it had a devastating effect on the German economy.
The Spiral of Recession (05:41)
In the early 1930s, the United States entered a severe economic recession that lasted for several years. Many people were unemployed, and those who could find work often had to take low-paying jobs. Soup kitchens were set up to provide food for the hungry, and marches were held to protest the lack of government assistance.
Depression Leads to Homelessness (04:28)
People were evicted from their homes and had to live in makeshift huts or in Central Park. These makeshift communities were called Hoovervilles.
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