The
Great Depression which started in 1929 was a major catacylismic event.
No one has ever figured out the reasons for the depression. John Kenneth
Galbraith states five reasons for this event. One is the stock market crash
in 1929. There also was an overproduction of goods. He also believed that
there was a surplus of banks and that the banks did not act wisely in that
they gave out too many loans. Another factor is that there was a tariff
and war-debt policy that curtailed foreign markets for American goods.
His final reason was the reports about the economy were not as detailed
as they are today. The Great Depression hurt the economy badly. People
who had money in the banks lost every penny. Since there was no FDIC in
the time of the depression, if a person lost their savings in a bank, they
were not insured for it. As the depression continued in America, people
with no money ended up living in shacks. When groups of these shacks were
built together to form shack villages, the people called themselves Hoovervilles
because they felt President Hoover was responsible for their predicament.
On Tuesday, October 29, 1929, otherwise known as "Black Tuesday," the stock market crashed nationwide, losing in total $14 billion dollars. Stockowners did not know what to do. The country was not ready for such a thing. All of the banks that participated in the buying and selling of stocks closed down. People ran to get the money out of their accounts, but there was none because the bank had used it. There were massive amounts of suicides. Instantaneosly, in one day, some people were millioneres and at the end of the day they were homeless, only having the money that they had on them. A couple of surviving banks collaberated and pooled their money, on Wednesday morning they bought all that they could, hoping to bring the prices back up to where the used to be. It was no use, stocks that had once cost $110 a share had in one day dropped to $1 a share. President Hoover had kept on telling the people to look up and things will get back to normal, instead they just got worse and worse. Houses and cars had to be repossessed by the companies that had sold them on credit. Except the companies did not want them because there warehouses were already full with brand new appliances and cars ready to be sold. The loan agencies did not want the houses beacuse they had no one to sell them to. The country was headed for a very deep depression and no one could stop it.
Matthew Brown