The great depression
what was the great depression
what led up to this
bonds
how did this effect people
stocks and shares
What did they do
why were they so popular
what happened
a big financial crash in 1929 that affected lots of lives for the worse.
people were stunned
People didn't have enough money to live
people lost jobs
People had nowhere to live and were living in cardboard houses
Stocks went down after people had put millions in them so people were now poor and had lost all of their life savings
The government turned a blind eye to all the things that
a loan from someone who invested to a someone like a company or government
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These were created by the government they were used to finance the war
Charles Mitchel (head of a bank) saw people invested in bonds and thought people would invest in respectable things
Charles Mitchell wanted people to invest in stocks so he tried to make them respectable like bonds
People thought they were unsafe and unreliable
They took off and people just kept on buying them
People thought they were safe and reliable
They heard about this get rich quick stories
People thought investing in them was exciting
They were made accessible by normal people unlike before.
consequences for companies
Companies who gave people money were not getting their money back and many were going bankrupt
People liked the idea of buy now pay later
They encouraged women to do it as well (mostly men handled money at that time)
In the financial district many people were overworked and the stock printers were behind and therefore useless
People who get rich from stocks cashed in on the naivety of gullible new investors
They would hype up stocks, buy them and dump them on the markets while the normal investors left with losings.
People thought this would backfire and it did
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aftermath
Lots of shares were suddenly sold and stocks dropped
People lost confidence in stocks because people saw that they had to payback what they owed (many people didn't have the money) this showed them the downsides of stocks
after the stocks dropped a group of bankers invested a lot into stocks to try and build its reputation back up
Stocks dropped because no one wanted to invest anymore because they knew the consequences
Franklin Roosevelt made sure that banks were under close supervision and were operating as they were supposed to.
Investigations tarnished the name of wall street because they were doing some bad things like selling stocks cheaper to certain people
Companies and people didn't recover for a long time
franklin Roosevelt tried to make people confident in the bank system again