The Wall Street Crash of 1929

'We in America today are nearer to the final triumph over poverty than ever before in the history of any land.' This was the confident state of new Republican president Hebert Hoover in year 1928. But the confidence has ended within a year, and America was plunged into the Depression.

In October 1929, Wall Street stock market crashed and the Great Depression has taken over the world economy. In the winter of 1932, America economic has fallen into the depths of the greatest depression in its history.

Unemployment has reached the number of 13 million people. Many people lived in such primitive conditions that were close to famine. In New York, one family even moved into a cave located in Central Park. More than 1,000 people in St Louis made shacks of scrap metal and boxes for living. All over America there was many similar Homerville’s.

Over 1 million unemployment people travelled over the country looking for work but everywhere was signs saying "No Men Wanted".

Hoover's popularity reached bottom by the time of election in November 1932. By the time of campaign, it wasn't even safe for him to show up on the streets. Hoover told his friends, after big defeat, "We are at the end of our string... there is nothing more we can do". The economy of America didn't recover until December 1941 when USA has entered into Second World War.

Causes of the Depression

  • In 1926, started collapse of land prices in Florida - this was signs that the boom was under threat.
  • Eventually, there was not enough people to buy goods that was been made in very large quantity.
  • In the 1920s Farmers had produced too much food that prices for their produce became steadily lower.
  • Too many small banks - these banks haven't got enough funds to cope with the sudden rush to take out savings, and exactly that happened in the autumn of 1929.
  • On the stock market was too much speculation - the middle class had a lot to lose and they had spent a lot on what amounted to pieces of paper.
  • The Wall Street Crash of October 1929 was nothing more than massive psychological blow.
  • America lent to European countries huge sums of money. And when the stock market collapsed, America decided to recall those loans. For the European economy, that recall had a devastating impact.
  • General world financial crisis was caused by collapse of European banks.