|
|
|
|
In the 1920s, after the World War I, a period called the “Roaring Twenties” followed. It was a time period where it was filled with new technologies and increased industrialization. As a result of these new changes, the economy benefited. Due to this strong economic detonation, stocks were seen as a very safe action and quickly became America’s favorite activity; many investors purchased stock on margin (“for every dollar invested, a margin user would borrow 9 dollars worth of stock.”) Soon, abundance millionaires were formed. Some investors imprudently invested their life savings in these stocks. The idea that the stock market could go down never occurred to them. On October 24, 1929, investors realized that the stock boom had been an over inflated “bubble”. Tons of investors became bankrupt immediately as every stock holder tried to dump their stocks. On October 28, 1929, the stock market officially crashed. Furthermore, because the banks had also invested on stocks, it lost all the money of other innocent people and could not pay it back. It left millions of people poor, jobless, and without a place to live. As a result of this event, the Great Depression followed. It was a time period when these people had to go live in small and filthy towns and suffer as the economy has just crashed; many committed suicide. They lived in depression since families were broken, people were out of business, and there was no money left to spend. Some blamed Europe for this happening. When Hoover passed a series of tariff (which raised it to 60%), Europe gets tired and passes a tariff against us as well. Therefore, American goods wouldn’t sell it Britain and they as well stop investing in our stocks and dump it; this is believed to be one of the reasons why Americans, too, started dumping their stocks |
by Yumy Lee & Carolina Rojas |