today we're looking at the stock market crash of 1929.
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you'll find more resources that go with many of the bell ringer videos the decade of the 1920s
sometimes referred to as the Roaring 20s had been a time of Social and cultural change in
America and unprecedented economic growth and spending however this economic surge was about
to come to an abrupt and sudden stop throughout the decade as Americans were spending more money
they were also investing in the stock market you might be asking yourself what is the stock
market many large companies and businesses sell shares or stocks in their company to investors
a stock is basically buying a small part of the company if the company does well and makes money
the value of its stocks go up and investors can then sell the share for more than they purchased
it for and make a profit of course if the come company does not do well then the value of its
stocks go down and investors lose money the New York Stock Exchange located on Wall Street
in New York City is the leading trading floor for stocks in the United States here each day
thousands and thousands of stocks are bought and sold a measurement of how well the stock market
is doing is called the Dow Jones which was created in 1896 by the editor of the Wall Street Journal
Charles Dow and his business partner Edward Jones the Dow Jones sometimes referred to as the Dow or
Dow Jones Industrial Average measures the average value of stocks among several leading companies
in the stock market and many economists look at it as a measure of how well the U.S economy
is doing from 1921 through 1929 the Dow Jones had only risen never dropping but always going up and
up as more Americans were spending and investing in companies many Americans had grown so confident
in the economy and the stock market that they began borrowing money to buy stocks or buying
stock on margin by putting small amount of money down and then promising to pay back the bank for
the rest once profits started coming in from their stocks they believed that the growth of
the economy would never stop and that investing in the stock market was a guaranteed profit Americans
from virtually every social class from the ultra wealthy to Blue Collar industrial workers were
putting their money in the market people were taking their life savings and mortgaging their
homes to get their money in the stock market believing that they could make enormous profits
by 1929 the Dow Jones had reached an all-time high of 381 points however some economists began to see
ominous signs as unemployment in America began to rise Farms were beginning to fail and overall
sales for companies were beginning to go down despite this stock market Brokers continued to
speculate or predict that stocks would continue to rise and Americans continued to buy more and
more stocks and purchase more and more on credit on Thursday October 24 1929 sometimes referred to
as black Thursday the stock market crash began stock market Traders began selling stocks at an
unprecedented rate the Dow Jones dropped by 11 percent in one day and the stock market
lost over 10 billion dollars in value this sudden drop started a snowball effect as more and more
investors were selling and getting their money out of the market the following day on Friday
October 25th the market stabilized somewhat giving investors some optimism however by the
next Monday October 28th the Dow dropped by 13 percent then the following day known as Black
Tuesday October 29 1929 the market fell again by 11 percent crowds of investors flooded the
streets outside the stock exchange wanting to get the latest news on what was happening with
their Investments over the course of four days of trading the Dow Jones dropped from 305 points to
230 points or an in other words the stock market had lost approximately 25 percent or one quarter
of its overall value the loss would be more than 30 billion dollars in the stock market
this massive drop caused Panic as now Banks were calling in loans and Americans who had borrowed
or bought on margin to get into the market had no way of paying back the loans in a very short
time many Americans had lost everything from their homes to their life savings America and the world
was now plunged into the Great Depression in 1929 the unemployment rate or percentage of Americans
without a job was about 3 percent but within four years after the crash the unemployment rate Rose
to close to 25 percent by 1933. it would take a full decade of economic hard times before the U.S
economy would recover so with that hopefully you learned something and thanks for watching foreign