In 1929 shrewd investors realised that the over production crisis was nearing and sold their shares. Confidence dipped and no one would buy shares in October this led to the crash.
On Black thursday 24th October 1929 selling began in earnest. But it was not taken seriously as some shares actually rose in value.
Over the weekend the situation appeared to improve, but a further big collapse took place on Tuesday 29th and this time their was no mistake. Share prices continued to fall until 1942 and lost 80% of their value
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The impact of the crash upon the economy
Easily the most important effect of the crash was the collapse of 5000 banks in the next few years. This not only wiped out the savings of millions of americans but also destroyed thousands of companies that could not finance their debts
With banking in ruins borrowing became impossible, so new companies could no be started. Sales of manufactured goods fell by 80% and with no new investment and falling demand workers were layed off.
Unemployment reached 14 million by 1933. In some areas of the country it reahed 30% of the workforce. 'Hoboes' travelled around looking for work, often riding illegally in railway freight cars.
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Social consequences of the crsah
Many people were ruined. They had borrowed more than they could pay back. There were several suicides. All over the USA, ordinary people, who had been led to believe that the stockmarket was a sure thing that could go on forever, found that they had been led astray
There was an enormous loss of confidence in the American way. No one spent any money so deamdn for goods fell. industry declined
In the USA at the time there was no dole, no state welfare. People were in dire poverty. Queues at soup kitchnen ran by cahrities and the rich became a common sight.
Cars, furniture even homes were repossed becasue people defaulted on the hire purcahse or mortgage repaymenys. Many people lost thier homes. shanty towns began to appear on the outskirts of many American cities. Theyr were nick-named Hoovervilles
The appeared to be no way ut of misert and the government did not seem to care. Hoover commented 'obodys actually starving' Soon people were commenting IN Hoover we trusted now we are busted
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