the stock market crash “and we all fall down...”
TRANSCRIPT
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The Stock Market Crash
“And we all fall down...”
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Stock Market Crash
1920s - Canadians were optimistic about the stock market
To gain greater returns, investors began buying on margin
Sept. 1929 - Some investors sell shares for cash
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Late October: number of stocks for sale outnumbers demand
October 29, 1929: BLACK TUESDAY
New York Stock Exchange collapses
Toronto Stock Exchange fails as well
Great Depression begins
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Cause or Effect
Was the stock market crash of 1929 the cause of the Great Depression or was it an effect?
What’s the difference between cause and effect?
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Causes of the Great Depression
The Single Men's Unemployed Association parading to Bathurst Street United Church, Toronto
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Overproduction and Over-expansion
Industries produced too many goods that people couldn’t afford
Companies expanded their manufacturing capacity, producing even more goods than people could buy
Huge inventories piled up
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Factory owners started to lay off workers
Unemployed people have no money to buy goods
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Canada’s Dependence on a Few Primary
ProductsCanada depended too much on the production of wheat, fish, pulp and paper
Less diversity meant fewer products and a smaller market
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Canada’s Dependence on the U.S.
Imported 65% of products from the U.S.
Exported 40% of products to U.S.
When the economy collapsed in the U.S., it had to collapse in Canada
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High Tariffs Choked off International TradeProtective tariffs in the U.S. and Europe prevented nations from trading goods with one another
Less goods traded = bigger inventory and more unemployed factory workers
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Too Much Credit Buying
Canadians encouraged to “Buy Now, Pay Later” to purchase goods
Led to much personal debt
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Too Much Margin Buying of Stocks
Many people bought stocks from various companies because profits were always increasing
Stock Market crash wiped out 50% of all stock value in a few hours
Big and small investors wiped out!