Crack of 29: short summary
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The United States is the country with the greatest economic power today, but there was a moment in its history when the entire economy of the country was in crisis, causing a serious social and economic crisis, the so-called Great Depression. The Great Depression began with the crash of 29, the crash of the American stock market, one of the hardest moments in the history of the United States. To understand this event that started the great crisis, today in this lesson from a PROFESSOR we are going to offer you a short summary of the Crack of 29.
Index
- Background of the Crack of 29: the happy 20's
- The Crack of 29: development of the stock market crash
- What was the Great Depression
Background of the Crack of 29: the happy 20s.
In the 1920s, the United States became the world's great economic power. It was at a time of great growth, in which the evolution of the American economy did not seem to end: these years full of prosperity were called the
Happy twenties. All this was a consequence of a great influence of the United States in Europe, since it had become the main world exporter, taking advantage of the severe crisis in which European countries had entered after the First World War. Some characteristics of the Happy Twenties are as follows:- Evolution of many industrial sectors, taking advantage of the greater demand from Europe, some of these sectors being the aviation and the chemical industry.
- Appearance of Taylorism, a production system based on the division of the different production phases.
- Companies are concentrated, causing the creation of holdings Y trusts.
- A large industrial overproduction, due to the large requests for products during the First World War from Europe.
- Agricultural overproduction, with extraordinary harvests.
Little by little the European countries left borrowing from the United States, arriving at a moment in which they stopped buying products of the North American country, causing that the American economy will begin to decline. It was at that moment when the Happy Twenties began to end, beginning the process that would lead to the Crack of 29.
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The Crack of 29: development of the stock market crash.
The Crack of 29 was the biggest fall in the US Stock Market throughout its history, being one of the hardest blows in the history of the United States and causing the Great Depression o Crisis of 29. Its importance was such that it did not affect only the United States, but also influenced the economy of many European countries, which traded with the North American state.
The Crack of 29started with the call Black thursday, which took place on October 24, 1929. The events of Black Thursday were due to a series of causes that had occurred in the previous months, the events that occurred on that day were only the consequence of all these problems.
A week before Black Thursday, an abnormal number of shares began to be sold, causing all of Wall Street to fear the consequences that this could bring. Still investors were able to turn the tables, halting the big slide in stocks. Although they only delayed the inevitable.
On Black Thursday the drop was much greater, reaching almost a 10% drop, causing total chaos in the New York Stock Exchange and even causing the police to close the stock market. People were looking for sell your shares as quickly as possible, lowering prices as much as they could, although not even then people dared to buy.
The following days the stock market recovered a bit, but on Black Tuesday the stock market fell once again in history. From that moment the stock market did not stop falling during the following months, until in January 1930 it bottomed out, causing the Great Depression.
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What was the Great Depression.
To conclude with this short summary of Crack of 29, we must talk about its main consequence, that is, the beginning of the Great Depression or Crisis of 29.
The Great Depression was a economic crisis that lasted during the 1930s, before the Second World War. The crisis began with the crash of 29 in the United States and spread to a large number of countries due to the trade agreements they had with the North American country.
During these years, Americans' consumption dropped, companies had to close, unemployment increased to unthinkable figures and many crops were not harvested as there was overproduction. And all this also happened in Europe, due to their dependence on the United States.
The Crack of 29 had caused one of the greatest crises in history, which would take years to pass and would influence the rise of the fascist movement that would start the Second World War.
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