From Boom to Bust and the Wall Street Crash

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Boom to Bust:

-there were 'speak easy's', where the illegal alcohol was sold. There became a lot of tension between gangs who fought for control over possession of the alcohol

-more Americans moved from the country to the city and needed jobs. Wall Street was the place to be for this

-almost everybody had a boat

-the amount of millionaires increased by 4% in the 1920's and people started to become richer and have more money

-people came and wanted to the experience the entertainment

-the term 'Negro' was introduced and used for black people

-throughout the 1920's, technology opened up new doors, it had a huge impact on American lives. Electricity introduced new means of work and play and by the end of the decade, nearly every home had electricity

-cars introduced a feeling of freedom, and the government was spending millions on building bridges and roads

-radios were just as important as cars, everybody wanted one and everyone would listen to the radio

-throughout the 1920's things changed a lot for women, there were many jobs that allowed them to have a disposable income and they won the vote. The more daring women were known as flappers. Women's hair got shorter, as well as the length of their skirts

-people wanted these new modern pleasures, but they also wanted all the comforts from the past. This created a lot of tension

-many people joined the KKK (about 400 million members)- the Klan was about the hatred of black people and immigrants. They claimed that they were preserving the past

-people started to become fascinated by flying

-they were also very interested in the celebrities and 'heroes' of the time, including sports players

-by the end of the 1920's, anything seemed possible and America's future was looking bright- but in 1929, the stock market crashed and everyone lost their money- the Wall Street Crash

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The Wall Street Crash:

Buying on the Margin:

-the bank would lend 90% of the share price, the people would pay 10%

-by buying on the margin you would 'get rich quick'

-the government didn't regulate the banks- the Republican Laissez Faire attitude

-people were making a lot of money, even working class people

5 main problems for America in June 1929:

-overproduction

-speculation

-loss of confidence in the stock market

-protectionism

-unequal distribution of wealth

The Wall Street Crash-

24th October 1929 (Black Thursday):

-people realized that share prices wouldn't rise forever and stopped selling shares

-share prices stopped rising

-12 million shares sold in one day

-a group of bankers halted the collapse

-banks asked people who had bought on the margin to repay the money

-this led to mass panic and more people selling shares and further decline

29th October 1929:

-people selling shares for anything that they could get

-the stock market collapsed

Consequences:

-confidence gone

-many rich people lost fortunes

-100,000 businesses went bust

-run on the banks- 700 collapsed in 1929

-called in loans

Impact on businesses and people:

-big investors lost heavily-as much as $40 million by one family

-smaller investors who had used their homes as a guarantee had their houses repossessed and were evicted as they couldn't repay what they owned

-some investors committed suicide

-over 100,000 companies went bankrupt between 1929-33

-many banks went out of business and unemployment rose to 12 million by 1932

-many homeless built temporary shelters in parks- 'Hoovervilles'

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