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Homework Help: Social Studies: U.S. History: Black Tuesday
by Taylor Jepsen
The events that happen in the 1930's truly started in the late 1920's. The
"roaring twenties" as they called it, was a good growing year. Though there was
an over supply of goods that weren't considered necessities by everyone there
still was a high economy. Since there were so many rich goods that many couldn't
afford business men started a buy now pay later system. By 1929 60% of all cars
and 80% of all radios were purchases on installment credit. By 1929 80% of
Americans had no savings. Between 1925 and 1929 the amount of total installment
credit increased from $1.38 billion to over $3 billion. This rapid increase in
credit was resulted in a stock market bubble. Stock prices reached so high that
there was no since in buying, except for inverters who hoped to sell for a
greater price at a later time. RCA stock went from $85 to $420 during 1928. Many
investors thought that stock prices would continue to rise considering they had
in the past years. A bubble in the stock market was forming and interest rates
increased from 1928 to 1929.
On what is now known as Black Tuesday, October 29, 1929 the stock market
crashed! Almost 13% of the common American stock value was lost that day. Which
seems small compared to the 22.5% that had dropped in one day in 1987. Dow Jones
Industrial Average had fallen from 381 to 257, losing 1/3 of its value. The
buying drove the index up to almost 300 before it started falling again. The Dow
reached its final low in 1932 after losing almost 90% of its original value.
The Great Depression had lasted through the decade of the 1930's. As confidence
slowly crept back consumers started buying again, unemployment rated started to
fall and consumers again approached bankers who were willing to lend once again.
Homework Help: Social Studies: U.S. History
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