The Stock Market Crash Pg 73-75

The first months of Hoovers presidency bolstered his image as what?

A no nonsense administrator who got results

After convening a special session of Congress what did Hoover sign?

Agricultural Marketing Act

What was the Agricultural Marketing Act?

A campaign that promised to tackle the intractable issue of agricultural surpluses

What did the Agricultural Marketing Act demonstrate?

Hoovers assertive approach to governing

Hoover appeared poised to sustain the prosperity of what years?

The Coolidge years

Who was Irving Fisher

A respected Yale professor

What did Irving Fisher say about stock prices under Hoovers presidency?

Stock prices have reached that looks like a permanently high plateau

Fishers magical thinking was conventional among who?

Liberal economists and analysis’s 

Liberal economists saw the prosperity of the roaring twenties as what?

The beginning of a new era no longer bound by the periodic boom and bust cycle 

What was Fishers reasoning for believing in a new era not bound by the boom and bust cycle?

Increased productivity and efficiency, technological innovation, modern scientific corporate management and improved more accurate statistics

What was Hoovers theme of his campaign?

Unrestrained economics optimism

What did Hoover promise to seek?

The final “abolition of poverty”

Was Hoovers statement about economic prosperity within the mainstream of expert and public opinion at the time?

Yes

What was a sign of widespread confidence in the nations prosperity?

Americans poured money into stocks

How was the stock market affected by the pouring of money by Americans into the market?

The market soared to new heights

Who reported on the allure of easy money?

The Nation

What did The Nation report?

The allure of easy money enticed speculators looking to make quick fortunes

According to The Nation how did people try and make a quick fortune?

By playing the stock market

What did The Nation call speculators looking to make quick fortunes through the stock market?

Suckers

Who did The Nation say preyed upon suckers looking to make quick fortunes?

Unscrupulous brokers who bilked them w hie pocketing handsome commissions

What did buying on margin allow investors to do?

Borrow against future profits in order to purchase large amounts of stock with little up front money

What did the booming market conceal?

The significant risks behind buying on margin

When the stock prices fell what did brokerages issue?

Margin calls

What did margin calls do?

triggered forced sell-offs and cause the whole edifice to collapse

How much government regulation was there in the stock market during the 1920s?

Very little

What is an example of a ethically dubious practice in the stock market?

Insider trading

Is insider trading legal today?

Yes

What was one popular tactic used in the stock market?

A group of investors pooling their resources to coordinate a large purchase of stock, pushing its value artificially higher then dumping the stock before its value falls

What reforms did Congress pass?

the 1934 Securities and Exchange Act

A pool drove the stock price of what up?

RCA stock

How much did the pool drive RCA stock up?

61 points

How long did it take for the pool to raise RCA’s stock by 61 points?

4 days

When the pool cashed out who lost huge sums of money?

Investors

What percent of Americans owned stock?

8%

Who made up a small percentage of the nations stock trading?

Ordinary punters

The bulk of stock was conducted by who?

Banking powerhouses

What is an example of a banking powerhouses?

Goldman Sachs

What did Goldman Sachs do?

Launch several massive investment trusts capable of moving hundreds of millions of dollars worth of stock in a single day

Int he early fall of 1929 the markets steady upward march was replaced by what?

A rollercoaster of alternating dips and rallies

Did the fluctuations give any big indication that the bottom was about to fall out?

No

Where did crowds gather on Black Thursday?

Neat the Wall Street headquarters of the New York Stock Exchange

What is the short term for the New York Stock Exchange?

NYSE

How many sales were there on Black Thursday?

More than 13 million

People gathered outside of the NYSE were marveling at what?

The flurry of trading

How large was the trading?

So large that thr ticker ran half an hour behind

How much stock did Winston Churchill buy just a few days before Black Thursday?

20,000 pounds

What was Black Tuesday?

An even stepper stock market crash

When was Black Tuesday?

October 29th

Over a five hour span how much in stock value evaporated?

5 billion

How much did the Dow Jones Industrial Average fall?

A record 38 points

For the month of October the value of stocks listed by the NYSE declined by an average of what?

37.5%

How much did the value of stocks drop by?

26.1 billion

What were investors forced to do?

Sell their shares at a loss

What was the consequence of investors taking selling shares at a loss?

It left brokers holding greatly depreciated assets that were not sufficient enough to cover the loans taken out to buy the stocks on margin

By July 1st 1932 the total market value of all stocks was at what?

15.6 billion

July 1st 1932, what percent were stocks down?

82% from pre crash levels

One share of stock in the mail order department store Montgomery Ward was valued at how much before the crash?

$138

After the crash how much was stock worth for the Montgomery Ward?

4$

Were Americans affected directly after the stock market crash?

No

Why weren’t most Americans affected by the crash?

Most Americans didn’t own any stock

What did The Saturday Evening Post reveal?

The crash received surprisingly little coverage well into December of 1929

Of the magazines that did talk about the crash, what did most of them say about it?

They downplayed its significance or assumed readers that the worst had passed

How did Hoover feel about the stock market crash?

He like the magazines didn’t feel as if it was significant

What was Hoovers message to the American people?

Everything is going to be okay

What did Rockefeller say following the crash?

The time was ripe to invest and that he had personally purchased a large amount of common stock since the crash

Rockefeller’s confidence resembles what mantra?

“But the dip”

The mantra buy the dip is popular where?

Among todays crypto and mem stock investors

Who was Andrew Mellon?

Treasury Secretary in the Hoover Administration

How many times was Mellon Treasury Secretary for?

3 times

What did Andrew Mellow believe about the doctrinaire laissez-faire?

The crash had exposed corporations who employed questionable practices to wildly inflate their stock value

Mellon saw the crash as what?

Natural and even a healthy force that would purge the rottenness of the system

What did Hoover and Mellon agree on?

The fundamentals of the economy remained sound

What did Hoover say about the economy following the crash?

“Any lack of confidence in the economic future or the basic strength of business in the United States is foolish”

When did Hoover make his statement about the economy?

Mid-November

In New York, construction of what continues?

The Empire State Building

Where was the Empire State Building located?

The corner of Fifth Avenue and Thirty-fourth Street

What did the Empire State Building serve as?

A physical monument to the cities stubborn determination to deft economic headwinds

By the time the Empire State building had become the world largest tower, what percent of New York’s construction workers lost their jobs?

64%