The day the US stock market crashed – level 3
After World War I, European countries had big debts. Hyperinflation was very high in Germany, where a loaf of bread cost 3 billion marks. However, for America, the 1920s were a golden age. Mass production was increasing, salaries were rising, and there were a lot of luxury goods on the market.
There was no indication that these times of prosperity could ever end. Therefore, trading on the stock exchange became a great attraction and popular pastime. Stock prices were rising steadily, so the idea of easy money attracted ordinary people who didn’t know much about trading.
These people also didn’t have enough cash for buying stocks, so they borrowed money from banks and bigger traders. They believed that the stock exchange would quickly increase the money in their stocks.
Then October 24, 1929 came. It was a day that people later called Black Thursday. On that day, a huge number of people decided to sell their stocks, but there was no one to buy them. Prices began to go down. The market collapsed as a lot of people lost all their money but still owed the banks.
Many small investors, banks, and companies went bankrupt. Hundreds of thousands of Americans found themselves homeless and without work.
Difficult words: debt (when you owe money), hyperinflation (when the cost of things goes up very high), prosperity (times when good things happen), trading (activity of selling and buying), stock (a piece of paper that represents a part of a company), exchange (a place where people buy and sell stocks), pastime (a fun thing to do), ordinary (normal), owe (have a debt), go bankrupt (lose all your money in a business).
What did the people expect to happen on October 24, 1929, that wasn't realized?
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