Stock Market Crash of 1929
The Wall Street Crash of 1929, also known as Black Tuesday or the Stock Market Crash of 1929, began in late October 1929 and was the most horrific stock market crash in the history of America. The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries.
Effects Of The Crash
The Stock Market Crash of 1929 had led to the Great Depression. While in the Great Depression unemployment had rised to about 25%, wages fell down by 42%, economic growth fell to almost 50%, and world trade plummeted 65%. That's because prices fell 10% a year due to deflation, and even before the crash began on Black Thursday the market
was kind of jumpy. The Dow Jones Industrial Average had already fallen 20% from its September 3rd high. Markets
were frightened by the Hatry Case in late September, which caused the British
stock market to drop. Investors in Clarence Hatry's company lost billions of dollars when
it was discovered he used fraudulent collateral to buy United Steel, which means that fraud that prevents a party from knowing their rights or from having a fair opportunity of presenting them at trial. A few days
later, England's Chancellor of the Exchequer, Philip Snowden, described
America's stock market as "a perfect orgy of speculation." This is also the main reason why the Great Depression begun.
Crop Failure
Good harvests had built up a mass of 250 million bushels of wheat to be 'carried over' when 1929 opened. By May there was a winter-wheat crop of 560 million bushels ready for harvest in the Mississippi Valley. This supply went over and caused a drop in the prices of wheat so heavy that the net incomes of the farming population from wheat were threatened with extinction which would connect to the Great Depression by hitting farmers with poverty and etc. Stock markets were always sensitive to the future state of the service markets and the crash in Wall Street predicted for May by Sir George Paish which then arrived on time. Sir George Paish was an economist from Horsham, Sussex, England who was active for the Liberal Party and stood three times for them as a parliamentary candidate in 1922 and 1935. Also, in June 1929, the service markets position was saved by a serious drought in the Dakotas and the Canadian West. The oversupply would now be wanted to fill the big spaces in the 1929 world wheat production. From 97 cents per bushel in May, wheat rose to $1.49 in July within a one month time span. When it was seen that at this figure the American farmers would get rather more for their smaller crops than for that of 1928, but as stocks went up again and from far and wide orders came to buy shares for the profits to come.
World War II
The American migration for WWII at the end of 1941 moved about ten million people out of the Civilian Labor Force and into the war. WWII was a reason why the Great Depression had ended, because of the Industrial company. This meant that Industry companies would manufacture weapons and vehicles which made more opening jobs for the unemployed. It also had a dramatic effect on many parts of the economy, and may have helped the end of the Great Depression in the United States The government financed capital spending which had accounted for only 5% of the annual United States (U.S.) investment rate in industrial capital in 1940. By 1943, the government accounted for 67% of the U.S. capital investment. The Great Depression decade began into WWII and was ended by WWII as well. Reason being, would be the cause of the reductions in spending, taxes, and regulation at the end of WWII.
Smoot-Hawley Tariff Act
The Smoot-Hawley Tariff was an act sponsored by Senator Reed Smoot and Representative Willis C. Hawley and signed into law on June 17, 1930. This Tariff act is connected to the Great Depression because it raised raised U.S. tariffs on over 20,000 imported goods to record levels which was bad enough after their unemployment rate. The tariff level under the act was the highest in the U.S. in 100 years, and had exceeded by a small margin by the Tariff of 1828. According to Ben Bernanke, "Economists still agree that Smoot-Hawley and the tariff wars were highly counterproductive and contributed to the depth and length of the global Depression." which was said by Alfred E. Eckes, Jr., a chairman of the International Trade Commission in the Reagan era discounts this and says Smoot-Hawley had little effect on the severity of the Great Depression.