Causes of the Depression: The Stock Market Flashcards
What was the stock market filled with?
Unregulated over-speculations, which facilitated many citizens to have a share in the stocks market.
How did the over-speculators invest?
Although they lacked the cash so, they purchased the stocks on credit, an aspect referred to as margin buying.
What did large-scale margin buying result in?
More loans meant to purchase highly prized stocks and their investment was lost when a crash occurred. The lenders could also not be paid and ended up losing their money.
What happened on October 24 1929?
Panic selling started as 12.8 million shares were traded.
Describe the Black Tuesday of October 29, 1929.
It marked the downfall of the market which was manifesting.
What had happened by July 1930?
Close to 41.22 million dollars had perished. The people who had purchased on margin or credit did not have the finances to clear the debts and the depression was at hand.
What did the panic stricken people do?
They cued to claim their dues but were only left devastated since the banks had no money.
What happened with deflation?
Deflation ensued since the circulating money declined drastically while money became a valuable asset owned by just a few.
What happened to workers?
Workers lost jobs and closure of businesses ensued. Investment in real estate deteriorated.
