Stock Market Crash
In October 1929 America's stock market took a severe turn and crashed after several years of growth. Throughout the 1920's, stock prices had been rising significantly and wall street was shown to be experiencing a Bull Market. However, though the stock prices had been rising, they were really just being over priced. As a result of the stock market crash, many aspects of the economy were impacted such as causing bank failures, unemployment, tariffs and federal reserves. Of those it was the American banks suffered most severely, thus hurting all of American's, even if they did not own any stocks. People flooded to banks in a panic, creating "bank runs", which was when people would withdraw all their money before they would loose it. Even though people withdrew their money in a panic, "Americans lost $140 billion of their deposited money" (Textbook). Bank failures caused all Americans to be impacted by the stock market crash. Another of the more important results of the crash was unemployment. Since banks were failing and people were on edge about the economy unemployment began increasing tremendously. "By 1932, U.S manufacturing output had fallen to barely half of its 1929 levels and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the workforce. Another 25% of the population experienced reduced wages and/or hours. Thus, ~50% of America was either unemployed or under-employed" (Textbook). This unemployment rate was drastic and a great concern among the American workforce which was a great concern since it was hurting the American economy. Unemployment and the bank failures were two of the major results of the stock market crash, resulting in loss of large amounts of money and the unemployment left many without an income. Through the results of the Stock Market Crash of 1929, the crash was then an indirect component to the cause of the Great Depression late on.
Above: Clip from The History Channel highlighting the bank failures caused by the Stock Market Crash of 1929.