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Hello, class. Today I am going to explain the economic crisis in 1929 and the economic

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crash that started in this year because the prosperity from the Rolling Twenties ended

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in the year 1929. This is an important year in the 20th century. At that moment, it began

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a severe economic crisis in the United States due to the excess of production in goods related

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to consumption. So in order to clarify this lesson, I've divided the presentation into

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two parts. I'm going to explain first the causes and finally the recession that started

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at that moment. So let's have a look to the causes of this crisis that began during the

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First World War. At that moment, the United States increased the production in order to

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supply as many goods as possible to the allies such as Great Britain and France, which were

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fighting in this war against Yemeni. However, obviously, at the end of this war, the demand

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of these goods such as weaponry, raw materials and other products decreased. And as a consequence,

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there was an accumulation of stock, there was an accumulation of products in agriculture

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and in industry. And as they didn't find enough buyers, compradores, prices began to

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fall and companies in agriculture and in the industry began to have losses in their accounts,

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in their numbers. So at that moment, there was an agricultural crisis because many farmers

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who had borrowed money from the banks to acquire new land and quinary and also that they increased

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their production to produce as many goods as possible to the British, to the French who were

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fighting in the war, they realized, the American farmers, that at the end of the war, the market

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could not absorb all their production. As a consequence, their stock accumulated, prices fell

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and many farmers who were unable to pay back their loans lost everything that they own.

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And the same happened in other sectors of the economy, like in the construction sector,

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it became a crisis because they built many, many buildings and houses, but the Americans,

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people in the United States, didn't have enough money to buy all these houses and new buildings.

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Same happened also in the industry, people had little power to purchase products, to buy

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products and overproduction was becoming a problem for the United States economy.

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So let me explain at that moment the real situation for the companies. The real situation for the companies

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therefore didn't correspond with their value stock in the market. So the real situation of the

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companies didn't correspond with their value in the market, in la bolsa. As a consequence of that,

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it emerged in 1929 an atmosphere of distrust and the rise in the share prices,

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in el precio de las acciones, slowed, step by step, slowed. So the crisis, to be honest, now I'm going to explain

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the spark of the crisis and then the recession, I'm going to explain the second part of the lesson.

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The spark of the crisis began on the 24th of October in 1929, when fear to a huge drop in

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prices, in the prices of the companies and the products, led that the investors in the market

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began to sell their shares, their stocks at a fast pace. However, when they tried to

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sell all their stocks, all their shares, when the brokers, when the investors tried to sell

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all their stocks, all their shares, acciones, at a fast pace than before,

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however, they couldn't buy any, any people who had the trust to buy all these shares. They couldn't

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find any buyers, compradores, and as a consequence of that, prices in the market plummeted hugely,

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exactly, prices in the shares plummeted in the market and Wall Street finally collapsed,

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crashed, and many companies, as a consequence of that, and many fortunes vanished completely.

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This is the moment when some owners of the companies and some people who had fortunes

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before the crisis began to kill themselves, regrettably, because they lost everything in life,

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they lost all their money. So it was an incredible situation because many investors were in absolute

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ruin. Actually, let me give you some data about it. On the 24th, during the Black Thursday,

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it was black because investors or brokers tried to sell 13, 13 millions of shares,

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but they couldn't find enough buyers, enough people who were able to buy all these shares.

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During the, on the 29th of the year, the important year of 1929, it was the moment of the Black

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Tuesday when the brokers and investors tried to sell 16 millions of shares, but, as I said before,

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they were not able to buy enough buyers to buy all these shares. This is the moment when the

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best companies at that moment in the world dropped 22% of their value, and pay attention to this

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important detail, 25,000 millions of dollars disappeared in the economy. It was a complete

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chaos because, as I said before, many investors were ruined and panic spread among the citizens

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who flocked, who moved, who ran, imagine the situation, quickly to the banks to withdraw

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their money, to take their money back. However, the banks were forced to close

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due to the lack of funds. When they ran there, here we have an image where we could find

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people in queue, in line, exactly, to take their money back, but when they tried to do it,

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they discovered that the banks didn't have enough funds, enough money, because banks

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exactly borrowed money to the farmers to buy land, to the common people to buy shares, to the

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companies, to the industries to buy machinery, and as a consequence of that, they were also in

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ruin. So, when this situation happened, when the banks were forced to close due to the lack of

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funds, in a few years, the crisis affected many industries, trade, and agriculture, causing a

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widespread economic recession, the Great Depression, and the consequence of that was

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huge unemployment, consumption decline, because people, families didn't have enough

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money to buy products, and many factories closed, as they could not sell their products.

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Unemployment rose to 13 million in 1932, 13 million as I said before, only in the United States,

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and many families, as a consequence of that, fell into poverty. But this is another story

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that I will explain in the following lesson with the Great Depression. Thank you so much.