Wall Street Crash Facts, Worksheets, History & Economic Impact For Kids (2024)

The Wall Street Crash was the collapse of the Stock Market in the U.S. after panic selling of stocks and shares by both professional and small investors. On October 29, 1929, also known as Black Tuesday, over $10 to $15 billion was lost when stocks completely collapsed.

See the fact file below for more information on the Wall Street Crash or alternatively, you can download our 22-page Wall Street Crash worksheet pack to utilise within the classroom or home environment.

Key Facts & Information

Historical Background

• The 1920s was also known as the Roaring Twenties when the United States enjoyed an economic boom. After World War I, America experienced financial prosperity and industrial growth. Technological advancement and mass manufacturing techniques in the U.S. met the urgent demands of the war such as armament and food supplies.
• After the war, manufacturers in the U.S. focused on consumer goods. The age of steel and electricity emerged, which also gave rise to the new labor-saving luxuries such as radios, irons and phonographs.
• Secretary of the Treasury Andrew Mellon introduced the Mellon Plan, which adopted policies of Isolationism and Protectionism that significantly cut government spending, reduced national debt, created more jobs, paid higher wages, enforced consumerism and introduced easy credit. Secretary Mellon was known as the greatest Secretary of the Treasury since Alexander Hamilton.
• In addition, cheap mass production using assembly lines, like the one pioneered by Henry Ford in making his Ford Model T automobiles, made luxury items affordable to ordinary Americans.
• Consumerism was further enforced by the radio industry, music (Jazz Age), Hollywood movies and stars, and easy consumer credit. The philosophy “Live now, Pay Later” became America’s view in the 1920s.
• Due to easy credit, consumer indebtedness massively increased to the point where almost 75% of the American population spent most of their income buying clothes, automobiles, food and radios, and depleting savings.
• This was the time when 10% of Americans gambled on the Stock Market through “buying on margin” or buying stocks using loaned money, which easily created the Long Bull Market.
• Stock prices increased from $50 per share in 1922 to $350 in early 1929. Investors were eager to buy available equity against other investors causing the increase of stock prices.

The 1929 Crash

• On March 25, 1929, a mini-crash on Wall Street was able to be stopped by banker Charles Mitchell. After that, the warnings of a crash were ignored by investors and stockbrokers.
• By the mid-1929, the construction industry was declining, steel production was reduced, automobile sales were down and consumers had ballooning debt due to credit interest. Despite these economic indicators, the stock market continued its upward momentum.
• By September 1929, professional investors noticed the dramatic decline in the economy and began to sell off their stocks. As share prices began to fall, more and more investors sold their stocks because they doubted their ability to pay off loans.
• On October 21, the panic on Wall Street began when stockbrokers made large-scale “margin calls” demanding prompt repayment of loans from their clients. Within four days (Black Thursday), almost 13 000 000 shares were traded on the Wall Street Stock Market.
• In an attempt to stabilize the market, leading bankers and investors bought blocks of stocks. On October 28, the stock market went into free fall losing $5 billion, which also spread to Europe.
• On October 29 (Black Tuesday), the stock market completely collapsed after panic-selling of all stocks. In a single day, between $10 to $15 billion was lost and millions of Americans lost their savings.
• By mid-November, almost $30 billion had been lost on the stock market as prices continued to drop.

Effects of the Wall Street Crash

• As stock prices continued to drop, the United States fell into the Great Depression. Despite many contributing causes of the depression, the Wall Street Crash was one of the major accelerators in this global economic collapse.
• By 1933, 30% of America’s workforce was unemployed, half of the banks were closed and businesses declared bankruptcy.
• The administration of President Franklin D. Roosevelt enacted several measures to lessen the effects of the Great Depression but failed to fully revitalize the American economy. It was only after 1939, at the time of WWII when the American economy turned around.

Economic Terms

• A stock is also known as shares or equity that signifies ownership in a corporation or a part of its assets and claims.
• The Great Depression was the worst economic downturn in American industrialized history, which lasted from 1929 until 1939.
• Isolationism was a part of the Mellon Plan, which decreased foreign competition on goods through a high tariff system.
• A bull market is a period of rising stock prices.
• Buying on margin refers to the buying of stocks using loaned money.
• Consumerism is the increase in consumption of goods, which is often desirable to the economy.

Wall Street Crash Worksheets

This is a fantastic bundle which includes everything you need to know about Wall Street Crash across 22 in-depth pages. These are ready-to-use Wall Street Crash worksheets that are perfect for teaching students about the Wall Street Crash which was the collapse of the Stock Market in the U.S. after panic selling of stocks and shares by both professional and small investors. On October 29, 1929, also known as Black Tuesday, over $10 to $15 billion was lost when stocks completely collapsed.

Complete List Of Included Worksheets

• Wall Street Crash Facts
• The 1929 Crash
• Stock Market File
• Roaring Twenties
• Business As Usual
• Crash and Smash
• Boom and Bust
• Words of Wall Street
• Photo Inference
• Stacks Collapse!
• Wall Street Press

Frequently Asked Questions

What caused the Wall Street Crash?

A lot of people were buying stocks with money they didn’t have. When the stock market started going down, these same people had to sell quickly to pay back their debts. This caused even more people to sell their stocks, which made the stock market go down even more.

How did people lose money in the Wall Street crash?

Because not only individual investors but also businesses had invested in the stock market, the crash badly damaged the United States economy. Businesses lost money when the stock market crashed. Consumers also lost money because many banks had put their funds without their consent or notification.

How many workers were unemployed in the Wall Street crash?

From 1930 to 1931, the number of unemployed people increased from four million to six million. At the same time, industrial production decreased by 50%.

Link/cite this page

If you reference any of the content on this page on your own website, please use the code below to cite this page as the original source.

Link will appear as - KidsKonnect, September 27, 2023