We just jumped out of World War I and crashed landed into the Roaring 20’s. What a booming time in our American economics! We learned about the stock market and how new companies need money to get their businesses off the ground, so they sell pieces of their company to people that are interested in their product. In return these investors own a piece of the company and get a certain portion of their money back when the company starts making a profit, these returns are called dividends. The financial investments allowed these companies to continue to grow and expand, leading to more jobs and investment opportunities. When people wanted to invest in a new company, but did not have enough money they started borrowing money from the bank. The increase in debt did not concern these borrowers because they thought they would have no problem paying back their debt quickly.
This was an exciting time for America, until people did not have enough money to pay their debt back. When this happened people no longer had extra money for luxury items like cars and radios, which meant the people selling those luxury items did not make any money. The investors who could not pay back their debt also began selling their stocks, which made other people nervous and begin to panic. On October 29, 1929, also known as Black Tuesday, the stock market crashed and many investors lost a lot of money. This crash sent the American economy in a downward spiral that lead to a lot of people without jobs or money to provide for their families, this difficult time is called the Great Depression. President Hoover was the president at the beginning of the Great Depression, but in 1932 Franklin Delano Roosevelt became president. President F. D. Roosevelt brought about a lot of change that helped people get jobs. Over the next several years, the economy began to recover and the economy began to stabilize again, at least for now.
There is more action on the horizon, but for now enjoy these videos. . .that’s a wrap!