Above: The stock market crash of October 4th, 1929
How did the Great Depression Begin?
The Great Depression began in 1929 when there was an usual recession. A recession happens when customers buy less and production of goods are slowed down. But on October 4th 1929, all the investors poured their money into stocks. About 129 million shares were traded that day they called Black Thursday. However, five days later on Black Tuesday, 16 million shares were traded as a wave a panic passed through Wall street. This resulted in a million of shares to be worthless and investors who bought stocks on borrowed money were left with nothing. This bankruptcy caused many people to stop spending, so factories slowed production and fired many workers. Many Americans then relied on credit and went into debt. This drastically increased the amounts of foreclosures and repossessions. And because of the gold standard, (a money system that the world shared, where every bill is backed up by an amount of gold), the depression spread everywhere, especially Europe. Throughout the panic, President Herbert Hoover then promised everything would get better, but he did nothing. In fact unemployment grew worse- in 1930, 4 million were unemployed but by 1931, 6 million were unemployed.