People are screaming into telephones.
Papers are flying everywhere.
You look around the New York Stock Exchange as chaos ensues.
Two people run directly into each other sending the memos and sales orders they are carrying
into the air.
The important documents float down to the ground like delicate snowflakes, only to be
trampled a moment later by businessmen running for the doors.
“All is lost!” someone yells.
“This is the end!” a banker shouts from the mob trying to escape the mayhem.
Black Thursday is upon you.
The Great Depression is in full force.
The closing bell rings.
Stock trading comes to an end on Thursday October 24, 1929.
Sweat pours down your face as you wipe your brow with the back of your arm.
Your fingers are torn, blood trickles from the hundreds of paper cuts you received while
making deals and exchanging documents.
12.9 million shares were traded throughout the day and your sales only made up a miniscule
portion of it.
You tried to buy low and sell high, but the high never came.
Prices of stocks just kept plummeting.
You stuff your documents into your briefcase and exit out onto Wall Street.
You need a stiff drink.
Unfortunately, it is the time of prohibition and alcohol is illegal.
It’s time to go to a speakeasy.
You walk into a barber shop.
“Hi Bill,” you say to the man cutting hair.
You give him a polite nod.
He frowns at you and your overstuffed briefcase.
Bill knew what was coming from the stories the Wall Street guys told him during their
hair cuts.
He made a wise choice and sold his stocks a few weeks prior to the crash.
Bill didn’t get the best return on his investment, but at least his money was out of the stock
market.
You walk past the row of barber chairs and enter the phone booth at the back of the shop.
You dial 1-9-3-3 and wait.
There is the sound of a bolt unlatching and the back of the phone booth opens up to a
dark smoke filled room.
Businessmen sit at the tables in the hidden speakeasy smoking cigars and drinking bootleg
liquor.
Everyone needs a drink after the stock market crash today.
Unfortunately, things were only going to get worse.
You sit at an empty table alongside the hardwood wall.
As your body relaxes into the chair, you let out a heavy sigh.
You signal one of the servers that you’re ready for a drink.
As you wait one of the gangsters that owns the establishment makes his way over to you.
He saunters up to your table with a big smile on his face.
Business is good for the crime bosses during this time.
They are making huge amounts of money off of bootlegging alcohol.
They have also been loaning out money to those in need of it.
The gangster stands over you, the smile never leaving his face.
“I heard it wasn’t a great day at the stock market,” he says.
“Don’t forget, payment on your loan is still due at the end of the month… with
interest.”
The gangster places his hand heavily on your shoulder showing he means what he says and
there will be consequences if you don’t comply.
Like so many others during this time you are in desperate need of money to dig yourself
out of a financial hole.
Seeing themselves as good businessmen, the crime bosses use your desperation as an opportunity.
They increase their enterprises in loan-sharking and labor racketeering, basically what the
banks were doing, but under a different name.
And when the banks did it, it was legal.
Since half the banks are closed in the United States you need somewhere else to get a loan.
Gangsters have been picking up the slack.
They are happy to loan you money, with unbelievable amounts of interest of course.
After your unpleasant conversation with the gangster your drink arrives.
You spot one of your fellow bankers entering the speakeasy.
You signal him to come sit.
He plops down in the chair across from you.
“What happened today?” you ask.
“Black Thursday,” the banker responds.
He reaches out and snags a shot of grain alcohol from the tray of a server walking by.
He downs it in one gulp.
“That stuff will make you go blind,” you warn.
He looks at you, reaches down, grabs your drink, and knocks it back.
“Worse things could happen,” he says.
And worse things did happen.
The Great Depression touched every life in the United States and caused people all over
the world to suffer.
It was a time of unsure futures and loss.
What happened?
What caused the stock markets to crash and the American way of life to crumble?
How did 15 million Americans lose their jobs and nearly half the country’s banks fail?
Like many economic disasters there were several different reasons.
The decade before the Great Depression was given the name the Roaring Twenties.
Things were good in the United States.
World War I was over and the economy received a nice boost from wartime production.
U.S. businesses expanded rapidly and the country’s wealth more than doubled during this time.
Business was good, and everyone wanted a piece of the action.
Citizens invested in the stock market.
Whether you were a railroad tycoon or just someone working on the railroad, you put your
money in the stock market.
Money poured into the New York Stock Exchange.
Everything was great, until it wasn’t.
The agricultural sector had fallen behind and began to collapse during the 1920’s.
The average businessman and factory worker had no idea that farmers were struggling to
keep their land and maintain crop production.
But the failings of the agricultural sector started to lead to higher prices for food.
Even with these high prices the farmers couldn’t keep up.
They started to panic, but the government didn’t want to hear it while the economy
was doing so well.
Maybe they should have listened to the farmers a little more closely.
Politicians were not the only ones living on cloud nine.
Banks were giving out loans like money grew on trees.
The government wasn’t regulating them, so they were free to give and take money as they
pleased.
Bad investments were made, but who cared?
There was always another opportunity right around the corner.
Unfortunately, working wages had not kept up with the huge profits that banks and corporations
were making.
People started to borrow, and borrow, and borrow.
They would spend the money banks so generously gave out, but had no way to repay the loans
and the hefty interest that went along with it.
Money kept pouring into the stock market, but it was money that the buyers didn’t
really have.
Stock prices were inflated and in excess of their real value.
Then it happened.
Investors and consumers got a glimpse of what was on the horizon and lost confidence in
the stock market.
Everyone wanted out all at once.
That is when Black Thursday and the subsequent crash of the New York Stock Exchange led to
the years known as The Great Depression.
The United States was not the only country affected by the stock market collapse.
International trade was still recovering from World War I.
Many European countries relied heavily on American sales and investments for income.
They also owed the United States huge sums of money in loans that had been given to help
Europe rebuild after much of the continent and the people living there were ravaged by
the war.
The United States needed money, Europe didn’t have any to give, and the money the world
was making off of the lucrative United States stock market went to ashes overnight.
The world economy was on the brink of collapse.
But what about you?
What about the average citizen?
What was life like for someone who had invested heavily in the stock market and lost everything.
It was not pleasant to say the least.
You return home after another long day of looking for a job.
You are covered in dust and sweat from walking since sunrise.
You have gone to every open factory, but no one needs more help.
Business is not booming and they are already at capacity for workers.
This is the story that the average American citizen was told when looking for work.
Even manual labor jobs are hard to come by, and when you do find one, they pay pennies.
The government has been creating public works jobs and employing thousands of people.
But even the government doesn’t have enough money to pay their workers, and layoffs ensue.
When you aren’t looking for jobs you are standing in line for soup kitchens.
Everyone is hungry.
Relief organizations can not secure enough food because of the failing agricultural industry.
The lines for soup kitchens span city blocks.
Even if you wait in them an entire day there is no guarantee they will have any food left
when you reach the front of the line.
Massive marches are organized to force greedy bankers and the government to provide more
public services.
Protesters set up camp outside government buildings because they have nowhere else to
go.
Everyone needs support and those who still have money are not willing to let it go to
help the common person.
Unfortunately, poverty and hunger are not the only things to plague American citizens
during The Great Depression.
Disease such as tuberculosis goes unchecked.
The healthcare infrastructure in the United States is underfunded and there are not enough
trained doctors and nurses.
If you get sick, you either live with your illness or die.
There is little or no hope of getting help.
The winters are cold and harsh, causing vast numbers of homeless and sick people to freeze
during these months.
Life expectancy and birth rates drop because there just aren’t enough resources to support
the elderly or newborns.
It is a time of tragedy in the family life of United States citizens.
You and your family pass the time by going to weekly shows.
Every Sunday Shirly Temple plays on the big screen.
If the show is not free you can always just sneak in.
The community tries their best to support one another.
If someone falls ill, others try and help in any way they can.
This can be something as simple as giving pieces of coal to warm up an apartment, or
handing over a few cents that may be spared if they are lucky enough to have a job.
Life is hard during The Great Depression, but people band together to try and get through
it.
Without the support of the community no one will make it.
Not all populations were affected the same way.
Although there were some wage policies put in place for white working men, black men
were not afforded the same treatment.
Farm and manual labor jobs that black men worked had no wage minimums.
Therefore, when times got hard, business owners could drop the wages to unlivable levels.
But people had to work even if it was for next to nothing.
Black communities were not given the same relief packages from the government as white
communities due to discrmination practices within local governments.
Despite all of this tragedy there was a beacon of light on the horizon for the black citizens.
Under the Roosevelt administration there was what came to be known as the “Black Cabinet”
led by Mary McLeod Bethune.
Bethune was a champion for racial and gender equality.
As Roosevelt's director of Negro Affairs of the National Youth Administration, she ensured
that every New Deal agency had a black advisor on it.
The number of African Americans working in government tripled under her leadership.
Civil Rights still had a long way to go, but it was through Bethune’s passion for equality
and hard work that strides were made during The Great Depression to make the country more
equitable for everyone.
There was one group of Americans who actually gained more jobs during the Great Depression.
The number of employed women rose by 24 percent.
The marriage rates during the Great Depression decreased by 22 percent.
Nobody could afford to date or start a family without money or a job.
This in turn led to large amounts of single women looking for employment to support themselves
and their families.
Jobs available to women such as nursing, teaching, and domestic work were still in demand.
The messed up part of this system though was that the government’s wage codes set lower
wages for women than men.
By law employers could pay women less than men for the exact same job during this time.
Unfortunately, although these wage codes were abandoned and now everyone under the law should
receive equal pay, reminance of these policies from the Great Depression still plague working
women in America today.
Towards the end of the 1930’s Franklin Delano Roosevelt and his New Deal policies began
to restore the country to normalcy.
Relief packages and regulations allowed the banks to begin to recover and companies to
provide more jobs.
Then World War II began.
War time is always lucrative for United States industries.
Businesses ramped up war time production.
This created more jobs and money.
Funds from abroad began to flow into the United States economy, as foreign nations paid for
equipment and products to fight the war.
It is sad in a way that war leads to profits, but it may have been what saved the United
States from The Great Depression.
The 1930’s were a rough time in the United States to say the least.
There were practically no high paying jobs and the average American lost everything.
Without the support of community, and relief organizations, millions more would have died.
The Great Depression should be a warning that loose regulations and poor government oversight
can lead to disaster.
Until recent events the United States economy was growing rapidly.
It is eerily similar to the growth that the stock exchange enjoyed during the Roaring
Twenties.
It may be time to take a step back and make sure that banks and businesses are following
sustainable practices.
Economic growth is not necessarily a precursor to a stock market crash.
But it is always good to make sure that stock prices actually reflect the true value of
companies, instead of an inflated value.
Unrealistic stock prices could cause the stock market to pop and crash in the blink of an
eye, as it did on Black Thursday.
Now go check out W”orst Days In The History of the World” and “Why Winning The Lottery
Is The Worst Thing That Can Happen To You.”