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Chapter 12 – Section 2

Chapter 12 – Section 2. The Stock Market Crash. Dow Jones Industrial Average. The average of stock prices of major industries By Sept. of 1929 it reached an all-time high of 381. Black Tuesday. October 29, 1929

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Chapter 12 – Section 2

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  1. Chapter 12 – Section 2 The Stock Market Crash

  2. Dow Jones Industrial Average The average of stock prices of major industries By Sept. of 1929 it reached an all-time high of 381

  3. Black Tuesday October 29, 1929 After stock prices started to decline people panicked and sold all their shares before they were worth nothing

  4. The Great Crash As a result of everyone pulling out of the stock market it completely collapsed losing $30 billion

  5. Why such a big deal? Brought to a sudden end the economic expansion of the 1920’s Began the Great Depression

  6. Effect on Middle and Upper class families They had invested everything hoping to make millions, but instead lost all their life savings

  7. The Great Depression A severe economic decline that lasted from 1929 until the U.S. entered WWII in 1941

  8. Factory Closings Millions of people took major pay cuts or lost their jobs

  9. Unemployment by 1932 12 million 25% of workforce (1 in 4 people) Unlike today, U.S. had no unemployment insurance so you were on your own

  10. The Gross National Product (GNP) The total value of all goods and services a country produces annually Went from $103 billion in 1929 to $56 billion in 1933 Cut in half!

  11. How did the effects of the Crash spread? Restaurants and other small businesses closed becausepeople couldn’t afford anything Once wealthy families let household workers go Already low farm prices went even lower

  12. Bank Crisis Thousands of banks closed becauseeveryone rushed to take their money out Banks didn’t have itsincethey had loaned it out Money from 9 million savings accounts vanished

  13. Effect on World Economy Europeans relied on reparations from Germany to pay their loans back to U.S. We stopped investing in German companies Germany couldn’t pay reparations Europeans couldn’t pay us back

  14. *5 Effects of the Great Depression Millions of workers lose their jobs GNP falls dramatically Many banks fail Increased poverty leads to health and social problems Global economy suffers

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