What impact did the Wall Street Crash have on America?

Immediately after the US stock market crashed roughly 600000 speculators lost everything and were ruined.  Because the majority of these speculators took loans from the banks to buy these shares they could not repay the bank.  This caused many banks to collapse; the biggest of these was the Bank of the United States in New York, which went bankrupt in December 1930.  Almost one-third of New Yorkers saved with it.  To make things worse there were escalating problems with European banks and this had a knock-on affect to the American banks.  Because of this many people lost confidence in perfectly stable banks and withdrew there savings and keeping them rather than spending.  Many towns had there own bank and as word spread that some people were taking money out then so did everyone.  This only made matters worse and more and more banks collapsed.  People were cautious now and saved there money at home.  This just made matters worse as over production was made worse as people did not buy as many goods.  The stock market did not recover after the slump as nobody had the confidence to keep there savings in shares.  Because of the over production workers had to cut production and in labouring industries especially this caused the owners to cut the work force as they could not afford to pay for workers who they didn’t need.  This obviously increased unemployment and many agricultural workers were forced out of business and ended up living in slums in suburbs and made make-shift houses out of corrugated steel.  The American depression had well and truly started.

Many workers; most were black farm workers because these were the first who were out of jobs found themselves unemployed.  Others included factory workers – these lost there jobs because nobody was buying the goods so why pay for the extra men?  This meant that they had to go and live in slums in the outskirts of cities, these later became known as ‘Hoovervilles’  Many people even resorted to eating out of rubbish bins the situation was that bad.

However it is very hard to say that it was terrifically bad because there were many people who were already in a bad situation but it was just made worse.  For example farmers were already very poor and many had gone out of business already.  This was all down to over production – the farmers were already making to many crops because of new ways like fertilizers and the combine harvester.  However after the crash happened it was worse because people did not buy goods and it even ended up as bad that it cost more money to travel to the market then the farmers received for the crops.

In conclusion to this it is clear to see that the crash of the American stock market was a huge blow to nearly all Americans.  President Hoover had hoped that the affect would just be short-term but he failed to realise just what the lack of confidence would do.  The crash did not affect many people for quite a long time after the crash happened.  However in that time in America the rich were very rich and the poor were very poor.  Therefore many people were already living below the poverty line and so were not affected by it very much.  Many people at the time did not realise the way that a lot of people (especially in the south) were living.  Also the share prices were still higher than they had been a few years earlier but it was just the public who thought that it was worse than it was – therefore making the situation progressively worse rather than rectifying it.