The Great Depression was a time of total despair. Years of economic downturn not only affected the United States but may European countries as well. Americans endured lost of fortunes, homes, jobs and personal tragedies. Very few alive today remember what it was like, and to the rest of us, it is just a piece of history that we can only imagine. The Great Depression reeked havoc on the stock market, banking, industries, and agriculture that led to massive unemployment, breadlines and fear that lasted over a decade.
After the stock market collapse, the New York banks became frightened and called in their loans to Germany and Austria. However, without the American money, Germans
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In September prices started to dip downward. People were not that concerned and trading continued. Then on Monday, October twenty-first prices started to fall quickly. The volume was so great that the ticker fell behind; investors started to panic, knowing that prices were falling, but not by how much they started selling. This caused the collapse to happen much faster. A few bankers stepped in to try to stop the crash. But then on Monday the twenty-eighth prices started dropping again. On “Black Tuesday” sixteen and a quarter million shares changed hands and turmoil set in. Stocks fell so much that there were no buyers at any price. Faced with this economic decline the exchange closed and people lost confidence in the banks. (Boardman)
As depositors lost faith in the banking system over one billion dollars was taken out and hoarded. There was a run on the banks. Police were called in to help handle the crowds. All depositors who were able to get inside the bank before closing time got all of their money. The Emergency Banking Act closed all banks for four straight days, and put them under inspection by the national government. (Scharff) This brought about the creation of the Federal Deposit Insurance Corp. or FDIC. In case a bank folded the depositor would receive up to five thousand dollars per account; this was a guarantee from the government. These measures