In October 1929 the stock market crashed, wiping out 40 percent of the
paper values of common stock. Even after the stock market collapse, however, politicians and industry leaders continued to
issue optimistic predictions for the nation's economy. But the Depression deepened, confidence evaporated and many lost their
life savings. By 1933 the value of stock on the New York Stock Exchange was less than a fifth of what it had been at its peak
in 1929. Business houses closed their doors, factories shut down and banks failed. Farm income fell some 50 percent. By 1932
approximately one out of every four Americans was unemployed.
The core of the problem was the immense disparity between the country's
productive capacity and the ability of people to consume. Great innovations in productive techniques during and after the
war raised the output of industry beyond the purchasing capacity of U.S. farmers and wage earners. The savings of the wealthy
and middle class, increasing far beyond the possibilities of sound investment, had been drawn into frantic speculation in
stocks or real estate. The stock market collapse, therefore, had been merely the first of several detonations in which a flimsy
structure of speculation had been leveled to the ground.
Here is what things looked like
back in the 1930's
Whenever you find you are on the side of the majority,
it is time to pause and reflect --- Mark Twain
Kella
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