The Great Depression

The American Stock Market Crashed in 1929

1. In the 1920s, the USA was the most prosperous country in the world

• Wages were high and there was mass production of goods
• During this boom, the USA lent billions of dollars to help European countries recover from the effects of WWI
• American companies were performing well, so people borrowed money to buy shares in them.

2. But problems started to emerge. Many American companies overproduced - there was too much supply and not enough demand. There was also competition from countries like Japan.

3. In 1929, the American stock market crashed - people realised some companies were doing badly and rushed to sell their shares (parts of companies). By October 1929, the selling was frantic and share prices dropped - they lost value because no-one wanted to buy them during the panic.

4. Businesses collapsed and thousands of people were ruined - by the end of the month they were selling shares for whatever price they could get for them. This was the start of…