Bust/Depression - 2 Flashcards
What was a popular way of making money during the 1920s?
Playing the stock market
What term is used to describe the events of October 24, 1929?
Black Thursday
What did many Americans do in September 1929 due to falling profits?
Began to sell their shares
What was the consequence of shareholders trying to sell their shares on Black Thursday?
Share prices began to drop
How many shares were sold on the New York Stock Exchange on Black Thursday?
13 million shares
What was the average price drop of shares on October 29, 1929?
40 cents
True or False: 659 banks went bankrupt in 1929 alone.
True
What major bank failed in December 1930?
Bank of the United States
What were the two primary functions of American banks during this time?
- Savings
- Loans
Fill in the blank: The American economy faced a crisis due to ______, where factories produced more goods than could be sold.
overproduction
What tragic event occurred to George Gallies after the bank failure?
He hanged himself in despair
What did many Americans do with bank loans they took out to buy shares?
Could not pay back their loans
What did many investors realize about their shares when trying to sell them?
Shares were only worth something if someone was willing to buy them
What was the total loss for shareholders after the panic selling?
58 billion dollars
Why did foreign governments impose tariffs on US-made goods?
To encourage consumers to buy domestic goods
What was the effect of the Wall Street Crash on ordinary people?
Many faced ruin and financial despair
What did banks do with the savings deposited by people?
Loaned it to other people
What was the impact of the collapse in share prices on those who never bought shares, like George Gallies?
They were affected due to bank failures
What is the definition of the term ‘Great Depression’?
‘Great Depression’ refers to a time in a country’s history when factories close, banks fail, and unemployment reaches record levels.
How did the Great Depression affect factory owners?
Factory owners faced underconsumption as people could afford to buy less, leading to cut production, wages, and job losses.
What is underconsumption?
Underconsumption is when the production of goods exceeds the demand, resulting in unsold products.
How did the Great Depression impact banks?
Many banks went bankrupt due to unpaid loans, leading to job losses for bank managers and staff.
What was the effect of the Great Depression on factory workers?
Many factory workers lost their jobs, which also affected local businesses that relied on their patronage.
How did the Great Depression affect the very rich?
The very rich lost some wealth but often had property and land to fall back on, leading to lifestyle changes rather than severe hardship.