At the end of the 1920s there was a huge imbalance between the rich and the poor: 0.1 percent of society earned the same total income as the bottom 42 percent.6 This imbalance, combined with production of more and more goods and rising personal debt, would soon doom our country. When giving his state of the union address in 1928, President Calvin Coolidge remarked that "America had never been met with a more pleasing prospect than that which appears at the present time.”7 The next year, Economist Irving Fisher claimed "stock prices have reached what looks like a permanent plateau."8 These statements were optimistic but misguided. In the summer of 1929, the economy faltered as a result of oversupply in many industries; more goods were being made than were being sold. The areas of the market that suffered the most from oversupply were farming, steel and iron. Companies had no choice but to dump their products at a loss. These companies share prices began to fall. On September 3rd, 1929, shortly after Fisher 's statement, the stock market peaked. For the first time in a long time, steel production was down, banks were failing, and less homes were being built. Few people paid attention, but that would soon change. Over the next few weeks stock prices began to fall, and the lower the fell the more momentum they gained. Near the end of the day on Wednesday, October 23rd, 1929, stock prices dropped abruptly. When the closing bell rang, investors were rattled. Nobody knew what had just happened. That evening the fear set in. The word spread quickly on October 24th: the stock market was in trouble. Thousands of men and women gathered in front of J.P Morgan and Company at 23 Wall Street, looking pale and frightened. Fear and excitement had brought all those people there that day, if stocks were dropping their lives would be altered dramatically. Some people gathered there had all their money riding on stocks. The New York World, a popular newspaper at the time, explained the complicated economy of the 1920s. “In a society built largely on confidence, with real wealth expressed more or less inaccurately by pieces of paper, the entire fabric of economic stability threatened to come toppling down.”8 Confidence is a huge part of the stock market, when confidence wavers stocks do to. And they did. An estimated ten billion dollars were lost on the New York stock exchange that day.9 U.S. steel fell 17.5 dollars a share, General Electric 47.5 dollars, Radio was down 18 dollars, and AT&T slid by 34 dollars.10 The nightmare continued on Friday. As soon as the stock market opponent prices began plummeting with the same ferocity. Investors panicked, 13 million shares changed hands, the most in any day up until then.11 Over the weekend President Herbert Hoover went on the radio to attempt to hearten the American people. He claimed "the fundamental business of the country...is on a sound and prosperous basis."12 His reassurance did little to calm the public. The next week was no different. When
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Speculators who hadn 't lost all their money in the crash couldn 't resist buying stocks while the prices were so low. Feeling this was their chance, many poorer people who couldn 't usually afford to invest showed up at brokers offices eager to buy. Unfortunately this recovery was short lived. Less than a month later, the stock market again took a turn for the worse. The Dow fell once again, erasing almost all its gains since 1928.20 Many speculators, previously some of the wealthiest people in the country, had to change their lifestyles, selling their homes and most valuable luxuries. The number of unemployed workers, already high, began to rise. Consumers were forced to cut back on purchases. Department store sales, radio sales, and car sales fell. Products that had previously represented the prosperity of the twenties became hard to come by. Stocks continued to fall through October and into November, finally bottoming out on November 13th, 1929. The market recovered for a few months, but soon relapsed, and along with the rest of the country slid into the Great
Speculators who hadn 't lost all their money in the crash couldn 't resist buying stocks while the prices were so low. Feeling this was their chance, many poorer people who couldn 't usually afford to invest showed up at brokers offices eager to buy. Unfortunately this recovery was short lived. Less than a month later, the stock market again took a turn for the worse. The Dow fell once again, erasing almost all its gains since 1928.20 Many speculators, previously some of the wealthiest people in the country, had to change their lifestyles, selling their homes and most valuable luxuries. The number of unemployed workers, already high, began to rise. Consumers were forced to cut back on purchases. Department store sales, radio sales, and car sales fell. Products that had previously represented the prosperity of the twenties became hard to come by. Stocks continued to fall through October and into November, finally bottoming out on November 13th, 1929. The market recovered for a few months, but soon relapsed, and along with the rest of the country slid into the Great