What impact did the Crash have on the economy?

Banks started to go bankrupt
1. In 1929, 659 went bankrupt.
2. In 1930, another 1352 went bankrupt.
3. In 1931, 2294 banks went bankrupt.
4. In 1933 5000 banks went bankrupt.
5. In the short term, the large speculators were ruined. The rich lost most because they had invested most.
  1. They were unable to pay back their loans to the banks and insurance companies, so they were bankrupt. As banks failed, people stopped trusting them and many withdraw their savings:
    1. Loss of confidence in businesses
      1. Many Americans kept their money instead of buying new goods or shares.
    2. Massive unemployment
      1. Businesses cut production further and laid off more workers. They reduced the wages of those who still worked for them. By 1933, there were 14 million workers unemployed
    3. Homelessness
      1. Over a million of the unemployed had become homeless because they couldn’t pay their rents. The banks took possession of their homes. These people lived in “Hoovervilles”, they built their houses with old car seats, packing cases, scrap metal and wood.
    4. Explotation of employees
      1. Between 1928 and 1933 average wages fell by 60%. As workers were laid off or were paid less, they bought even less.
    5. Distress for farmers
      1. Farm production fell by 40%
        Farm prices had fallen so low that the cost of transporting animals to market was higher than the price of the animals themselves.
      2. Total farm income had slipped to just $5 million. The USA’s international trade had also been drastically reduced, falling from $10 billion in 1929 to $3 billion in 1932.

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What impact did the Crash have on the economy?

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	Created by FABRICIO PERRONE about 3 years ago